Two Kings Come Together - Google

Acquires YouTube

Siddharth Thapar
J040
Rahul Mehta
J041
Saad Khan J042

 Google Videos(originallyGoogle Video)isavideosearchenginefromGoogle.

Thisallowedwebsitestohostlotsofvideoremotelywithoutrunning
intobandwidthorstorage-capacityissues.
TheservicewaslaunchedonJanuary25,2005.
GoogleannouncedonJune13,2007,thattheGoogleVideossearchresultswould
begintoincludevideosdiscoveredbytheirwebcrawlersonotherhosting
services,inYouTubeanduseruploads.

Services
Amateurmedia,Internetvideos,viralads,andmovietrailers,televisedcontentand
movies.
Googlevideoisasearchengineforallvideoswhichhavebeenpreviouslybeen
hostedonotherdifferentvideohostingsitesaswellasvideosearchenginesincluding
whichinclude

GoogleVideoshadonlyaminorsharefromtheonlinevideomarket,amassing
around2.5millionvideosuploaded.

still exists

YoucanVideoSearchonvideos.google.com.

Userscansearchforvideosjustliketheycansearchforimages,news,books,
places,real-timeupdates.Thesevideoscanbefromanysourceontheweb,
includingYouTube.

History of
February14,2005
ThreeformerPayPalemployeesactivatedtheInternetdomainname"YouTube.com"and
startedtocreateavideo-sharingwebsiteonwhichuserscouldupload,share,andview
videos.
YouTubeatthetimeofacquisitiondeliversmorethan100millionvideoviewseveryday
with65,000newvideosuploadeddaily

From left to right: Chad Hurley, Steve Chen, and Jawed

Karim.

2005

Video HTML embed / Full-screen View / Subscriptions

2006

Groups / Personalized Profiles / 10 minute video limit

2007

Local language versions

2008

480p Video

2009

720p Video/1080 Video/Speech Recognition

2010

Thumbs Rating System

2011

YouTube Analytics

2012

Merger with Google Video

 GoogleInc.(NASDAQ:GOOG)announcedthatithasagreedtoacquireYouTube,theconsumer
mediacompanyforpeopletowatchandshareoriginalvideosthroughaWebexperience,for$1.65
billioninastock-for-stocktransaction.
Followingtheacquisition,YouTubewilloperateindependentlytopreserveitssuccessfulbrand
andpassionatecommunity
Google'swantscontinuedexpertiseinorganizinginformationandcreatingnewmodelsfor
advertisingontheInternet.
Ourcompaniessharesimilarvalues;webothalwaysputourusersfirstandarecommittedto
innovatingtoimprovetheirexperience.

Financial Guide in Acquisition

ThenumberofGooglesharestobeissuedinthetransactionwillbedeterminedbasedon
the30-dayaverageclosingpricetwotradingdayspriortothecompletionofthe
acquisition.
InconnectionwiththeacquisitionGoogleissuedanaggregateof3,217,560shares,and
restrictedstockunits,optionsandawarrantexercisablefororconvertibleintoan
aggregateof442,210shares,ofGoogle'sClassAcommonstock.
Backin2006,theacquisitionofYouTubebyGooglewasthesearchenginegiant'slargest
takeoverbyvalue.

 Weareexcitedtohaveclosedtheacquisitioninordertobegincollaboratingtoofferthe
bestinqualityanddepthofcontent,userexperienceandnewbusinessopportunitiesfor
ourpartners.
YouTubeandGooglewilltogetherprovideinnovativeandexcitingservicesforourusers
thatwilladdanewdimensiontoon-linemediaentertainment.

Press Journals
Thedealisanaggressive,maturemoveforGoogle,onethatshowsthatsenior
managementisnottooproudorstubborntoseethattheycan'tbuildeverything
themselves,

Benefits of Acquisition Deal

Themainbenefitofthedeal,however,maybethedifficultiesitcreatesfor
Google'srivals.Yahoo!andMicrosoft,aswellasNewsCorporationandViacom,
twomediagiants,allwantedYouTube.
Butthismissesthepoint:YouTube'svaluetoGoogleisnotitstechnology,butits
audienceanditsbrand,whichnoamountofcleverprogrammingcanduplicate.

Present Scenario
BroughtYouTubeunderacentralsystemofGoogle.
GooglecouldntsimplyputupanadvertisementusingAdsense.
Googleexperimentingwithvideoadvertisements.
Encouragingpublisherstousefriendlyadunitsizesandusingimageads

Video Ads
Paidcommercialadsof30secs.
Atthebeginningorinbetweenduringcommercialbreaks
Problem:
Alienateviews

Advertising Solutions
Advertiserscouldpickwhichvideotheywantedtheiradstoappear.
Googlecouldprovidebetterplacementofcertaintypesofvideossuchas
Infomercials.
CouldbeSponsoredListingorOrganicListingintheregularsearchresults
butwithVideos.
ForNon-VideoAds,Googlecouldsupplycontextuallytargetedadsbasedon
keywords.(*Risk)

 Advertiserscantargetadsonspecificvideopagesorspecificvideo
searchresult
Ex.Snowboardcompanytargetingthosewhosearchvideosrelatingto
snowboarding

Future Scenario
Google&YouTuberemainasseparateentitiesafteracquisition.
Googlesstrengthbeingsearch&innovating
YouTubebeingaleadingcontentdestinationwithabaseofuserswhocreateand
sharevideos

 Itsmissionistoorganisetheworld'sinformation,andalotofinformationhappens
tobeinvideoform.
78.6percentofthetotalU.S.Internetaudienceviewedonlinevideo.
Theaverageonlinevideoviewerwatched385minutesofvideo,or6.4hours.
107.1millionviewerswatched6.8billionvideosonYouTube.com(63.5videosper
viewer).

Competitors

 YouTubehasa45percentshareoftheonlinevideomarket,whichismorethanits
topfourcompetitorscombined.
AvaluationofannualprofitsuggeststhatYouTubeisnowworthbetween$10-15bn
whichissignificantlymorethanthe$1.6bnGoogleoriginallypaid.
YouTubenowgeneratesannualrevenuesforGoogleof$3.6bnperyearand
viewershipgrewby50%in2012alone.

Indirect Benefits
YouTubegainsGoogleacriticalsliceofgrowingonlinevideoeyeballs,whichwill
attractmoremarketingdollarstotheInternetasawhole.
YouTubegainsGoogleyetmoreimportantmeta-datawhichcanbecross-pollinated
withdatafromotherGoogleservices;
YouTubetrafficstrengthensGooglespecificallyinpeeringnegotiationsand
generallyinnetworkdesign;
YouTubepositionsGoogleverypowerfullyforakey
roleasagatekeeperinthecopyrightworld.

A Look Ahead at
GoogleandYouTuberemainseparateentitiesafteracquisitionandcontinuetoplay
theirownindividualstrengths.
Google:Searchandinnovation
YouTube:Leadingcontentdestination
Googlesearchresultsalreadycontainlinkstoyoutubeandyoutubevideoresults
appearingooglevideosearchindex.
Googlesupportsyoutubebyprovidingaccessto
searchandmonetizationplatforms.

THANK YOU !!!