There was talk that YouTube would seriously consider selling if the price tag is above... *let me get my water* Hmm hmm... $1.5 Billion.

So far YouTube has developed the eyeballs, the traffic, the content (serving 100 million videos per day, with 65,000 or so new videos uploaded daily), but it has not produced profit, and looks like it won't anytime soon. It does pull in some revenue numbers (below $100 Million/year), but nowhere near to be asking for so much. In fact, the costs for maintaining are rising every month to. The last I heard their bandwidth bill was somewhere in the vicinity of $200K-300K monthly.

Do you think YouTube's board is getting greedy, or do you think the $1.5 Billion is justifiable?

Best,

A company built on an 11.5 million dollar investment that's less than a year old, doesn't show a profit, and has a large overhead you would think wouldn't be worth much.
That being said, Grouper.com was sold for $65 million and if you compare the two companies it might make the 1.5 billion asking price justifiable.

IMO they might not get this much now, but they might get it once video makes it really big on the net, assuming they can finance themselves until then. I just don't see the 1.5 billion value there yet.

Then again, I'm so small that I can't really know how the guys/companies who have 1.5 billion to spend think.

Well, I can see it reaching that price, but not right away.
It's a well known website and it keeps growing every day.

As so its bills, especially for bandwidth.
Also, don't forget a few issues: copyrights (YouTube is trying to make deals with production companies and is doing OK in that field) as well as spam and scum memberbase that doesn't make it pleasant to be on the site in the first place.

Good point Art. The copyright thingy killed other popular websites/applications. It could very well kill this one at one point.

Mark Cuban is no stranger to internet millions and he's not a big fan of Youtube.

http://news.zdnet.com/2100-9588_22-6121034.html

Those are very harsh words. However, what he didn't mention was that YouTube has successfully signed a deal with a production company for artists like James Blunt or Madonna, and they continue to work with music companies on similar deals. Of course time will pass until they convince at least 20% of popular artists, so I am not sure how long they can finance the venture. YouTube can be an attractive investment if able to pay royalties for copyrighted material.

There were rumours NBC was one of the potential buyers, however, I don't think NBC shows Madonna videos and not paying the royalties on TV - I don't see them doing the same on the Net.

Ask and you shall receive! Google to pay 1.6 billion for Youtube?

http://www.msnbc.msn.com/id/15157075/

Oh my God!
Well, they have the server infrastructure to pay for all the bandwidth... and sell ads on their site (YouTube generates their revenues off Google's back in the first place). The lawsuits issue.. I find that most companies would rather opt to work with Google than YouTube management, because once its under their wings, YouTube will no longer be a "bad guy" in show biz.

I tell you one thing, YouTube suger-daddies are going to be very happy.

Aaaannd... Done!

http://www.bloomberg.com/apps/news?p...mcU&refer=home

According to the latest news it seems that Google wanted to beat its competitors, so that could be one reason for such a deal.I think the amount is justifiable.

I don't think the amount anywhere near justifiable.
However, Google's ad model has been moving toward audio/video ads, so YouTube presents a unique niche opportunity to sell video ads.

I think it sold for more than it was worth, one of the biggest investment google has ever made.

one of the biggest investments google has ever made and one of the best, youtube currently has 40%+ of the internet video market, and has already made advertising contracts with sony and warner, so the money is gonna come back like running water.