Ask a Dot-commer: Why Did Google Spend So Much For YouTube?

Today, Seattlest presents a new feature: Ask a Dot-Commer. Today's dot-commer is Dave Epstein, who's dot-commed it for AOL, United Online, and others since 1998.

So, dot-commer, why did Google spend more than $1 billion for YouTube?

Several reasons:

First, YouYube has decent deals in place with several content providers (such as Universal). This will allow them to hopefully resolve some of the copyright issues.

2) The main cost of YouTube is bandwidth. Google has some of the most optimized broadband pipes out there, so feeding videos to the masses will cost them less than it costs YouTube.

3) Google is all about finding out as much about an internet user as possible. People spend a shitload of time on YouTube (but not much time on Google). Google can monitor this and find out even more about us, thus creating even more targeted ads.

4) Google wants to create a video version of adsense. This will allow them to target video ads to consumers.

5) Google can use this once they roll out a new version of adsense as a way to bundle video and text ads to advertisers (especially major ones).

6) YouTube has a sexy demographic. Lots of people under 21.

7) Google has a lot of lawyers on staff so they can hopefully resolve copyright case law.

8) Overall, Google's main strategy is to put more and more content onto the web. The more content on the web the more people use Google. The more people that use Google the more Google knows about people and the more targeted ads that Google can serve people.

9) Google just became a dominant content player, which is something they were not.

10) Google bought them with stock, not cash so the deal wasn't as pricey as the number seems.

Thanks, dot-commer!