From Economist.com
Google has agreed to buy YouTube, a popular website where users provide the content, for $1.65 billion. Now the world’s leading search engine needs to work out how to make it pay
INTERNET years, like dog years, act to speed up the ageing process. Google, founded in 1998, is now considered to be something of an elder statesman. Perhaps the firm hopes to enliven itself by its decision on Monday October 9th to use a whopping $1.65 billion of its own shares to buy YouTube, a website that lets users post home-made video clips for others to share and watch. The latter has been in business for a mere 19 months.
The world’s biggest web-search engine has probably splashed out on something worthwhile. The website is young, but it matters more that its user are mostly young people, who increasingly neglect television and other traditional media channels and instead seek entertainment online. Advertisers are hoping to reach this audience now and secure it for the future. And ads are the means by which Google hopes to rake in big revenues.