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October 10, 2006
Google Buys YouTube
Isn't that great news? I mean for YouTube. We've entered an age in which data communications and data storage are essentially free. That phenomenon is creating fantastic opportunities for innovative ideas ... like YouTube. The company launched in the summer of 2005 and in August, 2006, had 19.1 million visitors. Think about that! 19.1 million customers in twelve months. And, I tell my students, it isn't over yet! Keep thinking about innovative applications of data communications and storage.
Mark Cuban thinks Google bought a mountain of lawsuits. I disagree. Sure, where there's a big pile of cash, there's always a lawyer willing to sue, but major media companies can't keep suing their future. Given any sort of reasonable business model and response from Google, major studios will cooperate. MyTube had closed deals with Warner Music Group last month and with Universal Music Group, CBS, and Sony BMG Music Entertainment last week.
Posted by DavidK at 09:23 AM | Comments (0)
Did Google Overpay?
$1.62 billion divided by 67 employees means $24 million each. Not bad for a year's work. Of course YouTube's three founders will get the lion's share. Also, they'll pay 30 percent to Sequoia Capital. According to the Associated Press, Google and YouTube have much in common ...
"The two companies even share a common financial bond: Sequoia Capital, an early Google investor that owns a roughly 30 percent stake in YouTube. Menlo Park-based Sequoia remains a major Google shareholder and retains a seat on the company’s board — factors that might have helped the deal come together after just a week of negotiation." source here.
Google paid 1.62 billion for 19 million customers per month. That's less than $100 per customer, which makes it a steal according to friends of mine in the cell phone business. They pay an average of $120 per new customer. Of course, the YouTube customers overlap the Google's, but even still... and the deal raised Google's price more than enough to pay for the deal.
Weird things happen close to the speed of light, close to absolute zero Kelvin, and when data communications and data storage are free!
Posted by DavidK at 09:19 AM | Comments (0)
Here's A Thoughtful, and Pertinent Article in Today's Wall Street Journal
The Wall Street Journal's timing couldn't have been better. Today they published "Dynamic Capitalism" a featured article by Edmund Phelps, recent winner of the Nobel Prize in economics. The subtitle of his article is "Entrepreneurship is lucrative --- and just." Two key graphs:
"The issues swirling around capitalism today concern the consequences of its dynamism. The main benefit of an innovative economy is commonly said to be a higher level of productivity--and thus higher hourly wages and a higher quality of life. There is a huge element of truth in this belief, no matter how many tens of qualifications might be in order. Much of the huge rise of productivity since the 1920s can be traced to new commercial products and business methods developed and launched in the U.S. and kindred economies. (These include household appliances, sound movies, frozen food, pasteurized orange juice, television, semiconductor chips, the Internet browser, the redesign of cinemas and recent retailing methods.) There were often engineering tasks along the way, yet business entrepreneurs were the drivers."
and
"I would, however, stress a benefit of dynamism that I believe to be far more important. Instituting a high level of dynamism, so that the economy is fired by the new ideas of entrepreneurs, serves to transform the workplace--in the firms developing an innovation and also in the firms dealing with the innovations. The challenges that arise in developing a new idea and in gaining its acceptance in the marketplace provide the workforce with high levels of mental stimulation, problem-solving, employee-engagement and, thus, personal growth. Note that an individual working alone cannot easily create the continual arrival of new challenges. It "takes a village," preferably the whole society." source
Well worth reading the whole thing.
Of course YouTube's Hurley and Chen didn't need the article, they just did it. Meeting with Google's Larry Page and Eric Schmidt over a meal at a Denny's restaurant. Maybe I should try the Grand Slam next time?
Posted by DavidK at 09:14 AM | Comments (0)
But, the Computer Told Me To!
Today's Seattle Times (p. A2) reports that an 80-year old German motorist followed the directions from his auto navigation system ... right through the "closed for construction" signs. According to the police in Hamburg, "The driver was following the orders from his navigation system and even though there were a sufficient number of warnings and barricades, he continued his journey ..." driving his Mercedes right into a pile of sand. No injuries to the driver and his wife.
If the map and the terrain disagree, trust the terrain!
Reminds me of the old joke of the lost Swiss mountaineers. Completely confused, they reach the top of a peak and one of them takes out his map and compass and triangulates on three nearby peaks. One of his partners anxiously asks him, "Do you know where we are?"
"Yes," says that triangulator. "See that mountain over there? We're right on top of it."
Posted by DavidK at 09:13 AM | Comments (0)
Explorer Gains Market Share
According to to www.OneStat.com. Microsoft Explorer gained market share since July. Explorer is up to 85.9 percent at the expense of Firefox.
Posted by DavidK at 09:12 AM | Comments (0)