Thursday, October 12, 2006

After YouTube

Now that Google has snatched up the leading online video site, will rivals shell out big bucks, or will the competition dry up for smaller sites?

Has the online video shakeout only begun or is the bubble about to burst?
Google's $1.65 billion agreement to acquire YouTube Monday is the latest, splashiest and most expensive of deals involving companies in the nascent online video business.

Industry experts say that Google's rivals, both traditional media companies and Internet firms like Yahoo!, need to reevaluate their online video strategies now that the search engine kingpin and online video leader have joined forces.

"I think certainly there is going to be a lot of activity. I don't think anybody wants to cede the market to Google and there are a lot of media companies that are poised to do something," said Greg Kostello, founder and CEO of vMix, a privately held video site.

But some caution that media companies also have to be careful of overpaying.

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