Wednesday, October 11, 2006

Google, YouTube – aftermath

This is a different angle of the Google and You Tube deal.

Many people, experts and analysts expressed the opinion that Google paid too high price for YouTube ($1.65B). Yes this amount of money is serious, okay, but do not you see that it represents only ~1.6% of the Google’s market capitalization at the moment the deal was closed, it is only 3.5 million shares out of all outstanding shares issued and not last represents a value less than the daily trading volume on the NASDAQ for Google shares.

Okay, one may argue that Google is multi-billion dollar earner, but in terms of internet metrics YouTube is number 10 (weekly’s average is 7) and Google is number 3, so it obviously translates that the web site ranked # 7 in terms of popularity and traffic on the web does cost only 1.6% from the value of the web site ranked # 3…

In our view this represents a bargain deal from the Google’s point of view…

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