The general reaction to the Google-YouTube deal announced yesterday was omigod it’s the dot-com bubble redux. How else to explain Google VP David Drummond’s Valley Girl-meets-beancounter explanation of how the $1.65 billion figure was determined: “We modeled this on a more or less synergistic kind of model.” Or like, it seemed like a nice number. Perhaps even more important than the Google purchase were YouTube’s earlier announcements of content-licensing deals with music powerhouses Universal Music Group and Sony BMG Music along with CBS. Those and previous licensing agreements should ease some fears that YouTube was headed down the Napster path and would end up litigated into oblivion.
While advertisers are no doubt salivating over the possibility of adding 15-second pre-rolls to the gazillions of videos popping up daily on YouTube, what’s the model for inserting ads into all that user-generated content? Will argent009, LisaNova, and the rest of the YouTube UGC flock be expecting individual rev-share deals?
Best part of the Google-YouTube deal: It was hatched at a Denny’s in San Bruno. “Larry, try the Grand Slam Slugger – it’s awesome!” “Thanks Chad – so $1.65 billion sounds about right?” “Rock on! Please pass the syrup.”