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October 10, 2006
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 October 10, 2006 09:19 AM | Permalink