Don’t believe the hype !
Rick Webb, co-founder and COO of the Barbarian Group, has posted an interesting comment on the “YouTube is doomed Guy : YouTube is still doomed”, published on SAI. After giving some clues on the analytics, he concludes:
“So my guess is that Google definitely keeps Youtube expenses below $100 Million all included so far, and my estimate is that Google could quickly be making MANY Billions of dollars in revenue from Youtube as soon as Google decides to flip the monetization switch. Which basically means to allow all Youtube content providers to activate overlay advertising on all their videos, which will include referals for 1-click sales including digital content sales and shipped products (for example 1-click Amazon buy), including integrated sales of merchandizing and much much more. Youtube hasn’t even integrated very much full length full quality commercially produced contents such as being a Hulu and all-in-one VOD provider.
Anyways, in my points Youtube will quickly become Google’s biggest source of revenues and profits, and I think it probably is the biggest part of Google’s future and I actually think the growth of Youtube view-counts and bandwidth usage is only at the very early stages and that we are soon going to be talking about thousand and millions of times more views and bandwidth usage once all people transfer their 5-hour daily TV watching to be source from Youtube through set-top-boxes and other ways to watch Youtube on the TV and on mobile devices”
I agree.
On october 2006 (almost three years ago !), Umair Haque gave this POV :
“Revolutionizing branding is the real play at the heart of all this. Google thinks they are closer now, with YouTube in their back pocket - because they have a platform for experimenting with branded ads.
I think the reverse is likely true: Google has no idea what normal people want (or even are like, if you like), and so a YouTube acq might be just a nice way to geek out, possibly earn a nice marginal revenue stream (a la AdSense/Blogger), but never really redefine the value chain in the way it wants.
4) Deal math - yes, the deal is rich. Especially since YouTube is not as lightweight a business as most others - it is relatively capital intensive, and will stay that way for at least the medium term. Google can scale/scope many of these costs away, certainly.
But basically the math of the deal boils down to this: whether you believe tomorrow’s attention is worth 10-20x today’s revenues.
Yes, don’t believe the hype!
*UPDATE* Rick Webb has kindly pointed out that the original author of the comment is “Charbax” and his URL is : http://techvideoblog.com/. Sorry for the mistake.
