Robert Young wrote an article for GigaOM suggesting that Apple buy YouTube and I have to admit that it's not as crazy as I first thought. Young's key points as to why AppleTube make sense include:
- Apple would end up with another spot in the Top 50 Web Properties according to comScore Media Metrix. In July Apple was ranked 12th with 31 million unique visitors and YouTube was 40th with 16 million unique visitors.
- YouTube would give Apple a way to tap online ad revenues.
- Jobs could fill in nearly all of Apple’s strategic holes in user-created content, distribution, and social networking with a single acquisition.
- It would sell more iPods, which are starting to reach a saturation point.
- It's a natural fit for the iPod video. "The online video phenom [YouTube] can be to the video iPod what iTunes was to the audio iPod."
- The promotional synergy/loop-back with iTunes could be significant.
- It provides a roadmap for the iPhone and the WiFiPod, greatly facilitating video uploading and sharing.
The problem is valuations. MySpace was purchased by NewsCorp for US$580M, Skype was purchased by eBay for US$2.1B. FaceBook was rumored to have been offered US$600M but turned it down. Supposedly the owners are holding out for US$2B. Young figures that YouTube can fetch US$1B in the Web 2.0 market and I just don't know if Apple will pony up that much cash.
A New York Times blog further smothers the fire:
Far fetched? Sure, especially considering that Apple prides itself on its in-house creativity and is not generally in the habit of making large acquisitions. Tech Trader Daily, a blog run by Barron’s, also questions whether YouTube’s content, which sometimes includes pirated clips, would square with Apple’s “hard-core stance on digital rights.”
And a commenter agrees:
This makes no business sense. Apple is intent on selling media, not giving it away for free. Additionally, whoever ends up buying YouTube ends up buying the hassle of removing content that is copyrighted. If Apple did this, it would have a nightmare on its hands dealing with DMCA issues. It’s bad enough copyrighted material is on YouTube, but if it was easily transferable to iPods, the lawsuits would come from every competitor known to man.Copyright issues aside, tools already exist to simply transfer YouTube videos to an iPod (witness Stinkbot's TubeSock). Apple can get a lot more out of acquiring YouTube than simple iPod encoding tools that bring a lot of legal baggage. Look at the content creation side of the equation. Apple already sells iMovie and Final Cut Pro video editing software. They could parlay the YouTube acquisition into a vehicle to sell a cheap version of iMovie (iTube?) optimized for editing DV cam, Web cam and camera phone footage - just like they did with podcasting in GarageBand.
Videos, it turns out, has the potential to sell both software (iTube) and hardware (iPods).
Why do you think Apple will/won't acquire YouTube?