Google buys the online video sharing site YouTube for $1.65 billion in history making move by the company.
The price makes YouTube Inc. most expensive acquisition made by Google during its eight-year history. During 2005, Google spent $130.5 million buying 15 smaller companies.
“This is the next step in the evolution of the Internet,†says Google Chief Executive Officer Eric Schmidt.
Although some critics have questioned YouTube’s staying power, Google is betting that the popular Web site will be an increasingly lucrative marketing hub as more viewers and advertisers migrate from television to the Internet.
Google chief executive Eric Schmidt was also quoted as saying “The YouTube team has built an exciting and powerful media platform that complements Google’s mission to organize the world’s information and make it universally accessible and useful,”.
“Our community has played a vital role in changing the way that people consume media, creating a new clip culture,” said Chad Hurley of YouTube.
“By joining forces with Google, we can benefit from its global reach and technology leadership to deliver a more comprehensive entertainment experience for our users and to create new opportunities for our partners.”
Google has said that the two companies will continue to operate independently and keep their own individual branding. YouTube its 67 staff, including co-founders Chad Hurley and Steve Chen, will keep their jobs.
YouTube, launched in February 2005 and has fast become one of the most popular websites on the internet, and a leader in the social networking space.
According to Comscore World Metrix, YouTube’s audience has soared from 2.8 million unique users one year ago to 72 million users in August 2006.
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