Google and YouTube: 10 Questions Left Unanswered

 
 
By Steve Bryant  |  Posted 2006-10-10 Print this article Print
 
 
 
 
 
 
 

So yesterday was the rapture. Google acquired YouTube and ascended into heaven. The search giant no longer files SEC reports, it just sends manna from the godhead.

Or, if you're given to episodes of sci-fi catharsis, maybe you think Google has just become SkyNet. That's almost like becoming God, but then finding out God looks like Arnold and needs more makeup.

Whatever. To borrow and misappropriate a phrase, the rumors of Google's world dominance have been greatly exagerated. Believe me, I was on the conference call announcing the acquisition yesterday. And, in between bouts of cursing the operator for not letting me ask a question I realized something: There's no plan.

Take YouTube co-founder Steve Chen's word for it: "We're not exactly sure what we're going to tackle first." At which Sergey quickly piped up, well, we're going to be doing a lot with search and advertising.

You don't say.

Not that Google is beholden to reveal its plans on a conference call. But when you justify your company's largest purchase ever with 1) "It was a good cultural fit," and 2) We have "20-30 ideas," and then don't reveal how you came to the $1.6 billion valuation, it leaves some questions unanswered.

To wit:

  1. How did you come to that $1.6 billion valuation?

  2. Google Video and YouTube will remain independent, but will the two companies make different deals with content owners? That sounds like a recipe for confusion. Will the purchase allow Google to focus Google Video on becoming a download store? After all, it's created its own desktop player and partnered with DivX last year.

  3. Will YouTube move its videos over to a Google data center? That would cut down on the cost side of the acquisition and set the foundation for further integration. Will YouTube be accessible via my Google Account in a few months?

  4. Who will sue Google first? Say what you will about Mark Cuban, he's right that Google has just stepped into a legal minefield. YouTube has been gambling that its enormous popularity, handful of content deals, acquiescence to takedown notices and shallow pockets would keep it safe from legislation. But now that YouTube belongs to a company with very deep pockets, legislation would seem inevitable. Google's task now is to convince content owners that visibility online is more important than keeping content locked down. But as we've seen recently, not everybody agrees with Google's economics.

  5. How has Google prepared for when companies start subpoenaing individual YouTube users? You can start with Wonkette, which uploads copyrighted television news content with its own logo inserted as a kind of pre-roll. (Although I admit, I love what Wonkette recommends.) How will courts judge user violations? Will you get fined $1,000 per infringement? Per 1,000 page views?

  6. How has Google improved its video content detection? During the call, both YouTube founders repeatedly mentioned that Google would help with better video indexing, metadata search and fingerprinting. I have no doubt Google will help with search. But last I heard, Google had admitted problems with indexing video on the Web for lack of metadata. (You know what'd be really cool? If Google also bought a company like Veotag and provided text annotations for the most popular videos. Or, if YouTube applied Google's "link within a video" technology, but made it more intuitive.)

  7. When will videos be added to search, especially to Google News and Google News Archive?

  8. Will Google start sending takedown notices to sites that help you to download videos off YouTube? You've got a few options.

  9. How will Google adapt to brand management? As John Battelle notes, this is Google's first time acquiring a brand that's really, really popular. YouTube has a different vibe--at least to external eyes--than Google. Also: Will Chad and Steve get sucked into meeting hell, as happened at Yahoo with Flickr, or at AOL with Calacanis?

  10. How will Google deal with YouTubers who game the system? As the Rabbit Bites blog points out, there's something rotten in the state of YouTube-ville-burg City. If you're going to be selling ads on that site, Google, better make sure this guy or this guy or this guy isn't inflating your page and video views.
I have no doubt that Larry, Sergey and Eric--before they even met Chad Hurley--spent countless hours thinking about buying YouTube or a company like it. To my mind, they're making a bet that YouTube will continue growing, and that that growth will continue to provide ample inventory for ads. I assume that, according to their math, the $1.6 billion spent now is less money than a) the billions they'd spend jockeying for ad deals in the future, and b) the opportunity cost of letting a competitor buy the site.

Sergey's right: Video is a very important part of content. But at the end of the day, Google made this deal in a hurry, which means there were external factors that forced its hand. That gives me pause to wonder at the wisdom of the deal, and should give you pause, too.

 
 
 
 
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