According to TechCrunch, Google is in talks with YouTube, finalizing an acquisition deal that would put YouTube in the hands of Google for a mere $1.6 billion dollars. So why would either party be interested in such a deal?
Google has about $10 billion in cash on hand, while YouTube has significantly less, and is quickly burning through its stash with extrodinarily high bandwidth bills each month. YouTube also has a massive audience that Google’s advertisers would l-o-v-e to tap into via AdWords. Such advertising would also significantly increase profits for Google, as well as investor confidence in the company.
Other reasons for Google’s interest YouTube include wanting to keep it out the hand’s of its competitors, who have expressed interest in acquiring the company in the not-so-distant past. Viacom, News Corp., Yahoo, and Microsoft are all said to be interested in YouTube.
Google already has a video service, dubbed “Google Video,” which ranks third amongst the major online video services. It is unclear if this acquisition occurred, whether Google Video and YouTube would meld together into one, or remain seperate entities.
Neither Google or YouTube has confirmed or denied the rumors. The rumors apparently came from a reliable, undisclosed source close who contacted Michael Arrington of TechCrunch fame.
