Robert Scoble headlines: “Google to Yahoo and Microsoft: The $1.65 billion was worth it,” as an end game conclusion to Google’s much ballyhooed Universal Search:
Ahh, now you all understand what I meant when I said YouTube is a moat, not a revenue generator. By putting YouTube results into Google’s main engine Google ensures it will have better searches than Yahoo and Microsoft (who were, truth be told, getting damn close to matching Google’s quality). And it does it in a way that Yahoo and Microsoft will not be willing to match. Seriously, can you see an executive at Microsoft advocating putting YouTube videos into Microsoft’s search results? I can’t. That’d be the equivilent of sending traffic to a competitor. It’d be what I advocate at this point, but that explains why I am a stupid blogger and not some multi-millionaire executive.
You said it!
He also said “I love Google’s strategy.” Here’s why he does, and then why his love is misplaced:
Google continues to mess with Microsoft’s strategy. Microsoft still treats each team as something that must make money. Google doesn’t do that. They didn’t care one bit that YouTube didn’t have any revenues. They knew that there’s other ways to make money off of YouTube than to force YouTube to monetize on its own.
The argument is a circular one. Google CEO Eric Schmidt has long said that the company’s end game is to drive searches through Google.com, through any and every means the company can, including via YouTube inventory (the video content inventory of others that is).
As I wrote earlier today in Google Search: Big, bad multi-billion dollar sandbox, all that matters to Google is selling more and more billions of dollars worth of AdWords.
Google YouTube is not an anti-Microsoft game. Moreover, contrary to popular opinion, Google is too shrewd to be driven by petty competitive skirmishes.
DoubleClick is not a $3.1 billion slap in the face to Yahoo and Microsoft, it is a $3.1 billion Google virtual land grab.
Google can hardly be accused of spending its billions to one-up Microsoft; Perhaps the other way around though.
Online Gaming: Microsoft Massive acquisition about $300 million; Google AdScape acquisition about $25 million.
Directory Assistance: Microsoft TellMe acquisition about $1 billion; Google boot-strapped, in-house GOOG-411
Scoble really misses the mark though in dismissing billions of dollars worth of copyright infringement lawsuits staring Google YouTube in the face:
Truth be told even I didn’t quite understand just what an impact that the YouTube purchase would have. It’s all very clear now. It also is even more worth putting up with billions of dollars of lawsuits.
Google YouTube is operating under just the same false assumption. Google has actually INCREASED its DMCA risk though, by integrating YouTube videos into Google.com search results.
And, Google couldn’t have picked a more inopportune time, given that YouTube copyright lawsuits mount.
Tomorrow is the two-week anniversary of the class action lawsuit filed in New York; The plaintiff argument is a compelling one and underscores how Google’s YouTube business model is in direct contradiction with the spirit of DMCA 512C (Google.com undoubtedly now too). How so?
Read my exclusive insider interview with the lead prosecuters Proskauer Rose in Google at Risk: YouTube class action lawsuit changes DMCA copyright game.