YouTube, Facebook: Is billion dollar Internet land rush fools' gold?

$1 billion for for Facebook? $1.5 billion for YouTube? Why not $2 billion or $3 billion? My personal jury is still out on the $580 million News Corp. acquisition of MySpace, which has been under the umbrella of a “respectable
Written by Donna Bogatin, Contributor
The relatively calm “back to serious business” September has gotten a jolt of good old fashioned Internet frenzy with two billion dollar acquisition “rumors”: New York Post ups its own previous rumored $1 billion valuation for YouTube by 50% to $1.5 billion and The Wall Street Journal signals a replay of the $1 billion Facebook for sale price tag.

While the WSJ is perceived as the leading authority for hard, factual business news and the NYP is known for its soft, gossipy “Page Six,” both publications are employing strikingly similar, unreliable “news” tactics of “reporting” unsubstantiated rumors from unnamed sources.

Also striking is the new sarcastic “angle” both the WSJ and the NYP are using in their “reporting” of YouTube and Facebook; Gone is the Internet star worship of the recent past.

NYP on YouTube: “YOUTUBE'S GOT A FAT IDEA OF ITSELF” Internet upstart YouTube, the bane-du-jour of copyright holders everywhere..."

WSJ (subscription required) mocking professionalism of Facebook founder and CEO Mark Zuckerberg, aka Harvard “dropout”:

During one series of talks with Microsoft, Facebook executives told their Microsoft peers they couldn’t do an 8 a.m. conference call because the company’s 22-year-old founder and chief executive, Harvard dropout Mark Zuckerberg, wouldn’t be awake, says a person familiar with the talks. Microsoft executives were incredulous.

In an interview, Mr. Zuckerberg declines to comment on any talks. The young entrepreneur says he generally works late—he recalls eating French fries recently in the parking lot of a local McDonald’s restaurant at 3am—and doesn’t get to work early. ‘I’m in the office at 10:30am sometimes,’ he says.”…

As Facebook’s popularity swelled, Mr. Zuckerberg, who wears Adidas sandals to work many days, dropped out of Harvard after his Sophmore year and moved to Palo Alto. The former computer-science and psychology major quickly set a brash tone, joking with colleagues about Facebook’s goal of “world domination” and once distributed business cards that read, “I’m CEO…bitch.”

Below are links to, and excerpts from, some of my most recent posts on Facebook, YouTube and the one Web 2.0 phenomenon that has been acquired, MySpace, in which I discuss how the social networking sites and the video sharing site are struggling to successfully monetize their significant traffic and usage while attempting, in fits and starts, to morph into “respectable,” corporate-friendly entities.

$1 billion for Facebook? $1.5 billion for YouTube? Why not $2 billion or $3 billion?

My personal jury is still out on the $580 million News Corp. acquisition of MySpace, which has been under the umbrella of a “respectable” corporate entity for over a year.

"MySpace and its 100 million unfriendly problems"

The MySpace phenomenon is not that its free platform has an almost unparalleled reach, or that its “anyone or anything is Tom’s friend” stance has yielded 100 million pages of the lowest common denominator of human, animal and product communication; It is that a business savvy multinational publicly traded media empire acquired the quagmire for $580 million, puts tens of millions of dollars into it for annual upkeep and stumbles around for ways to successfully monetize the unwieldy, uncontrolled, commercialized by third parties mess...

MySpace is not a mature fruit that blossomed from a well thought out, corporate business plan for rational growth. MySpace is an entangled, treacherous weed that mutated on its own from a Website launched cavalierly by two “cowboys.”...

MySpace has 100 million unfriendly problems; It can’t get the attention of its own "friends" and it can’t convince blue chip advertisers to give its 100 million "friends" attention.

"Google, YouTube: multi billion dollar "fair-use" risky bets"

The “fair-use” doctrine is critical to Google’s multi-billion dollar business and to YouTube’s hoped for billion dollar valuation.

Google CEO Eric Schmidt proudly waves the “fair-use” flag in defense of Google’s mission to obtain all the world’s content for free and YouTube directs its online copyright agnostic volunteer army of video uploaders to “fair-use” Websites.

Both Google and YouTube rely on a Web 2.0 crowd pleasing “content must be set freed” stance to garner public support for their self-aggrandizing business models based on obtaining, exploiting, controlling, owning and monetizing others’ content cost-free and on a calculated disregard for certain copyright owners’ rights over their own content.

Today’s YouTube announcement of a copyright protected distribution deal with Warner Music illustrates that YouTube can respect content owners’ copyright, when it wants to.

"Facebook to students: Zuckerberg and VCs are "in control":

On the heels of recently implemented, but unpopular, site "enhancements," Facebook is preparing another slap in the face to its Facebook student devotees and to Web 2.0 "users are in control" proponents worldwide.

Facebook is throwing caution to the wind and shedding its founding principle of participation by educational insitutional affiliation only policy...

Facebook is calling its new anonymous, open house strategy "expanded registration."

The Facebook about face will ultimately prove to be either a gutsy, genius move to scale its platform for enhanced monetization or a foolhardy stab at playing catch up with MySpace. Right or wrong, Facebook is compelled to make a big move.

ALSO SEE: "Top five reasons NOT to buy YouTube" and "YouTube worth less than Grouper?" and "Sony buys into online video sharing: $65 milion smart money investment?"

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