GoogleYou or GoogTube

It was announced last evening that Google is paying $1.65 billion  for www.youtube.com. Let me put that into some interesting perspective:

YouTube:

67 employees which works out to $24.6 million per employee. Not bad since the idea came from a dinner discussion between the founders and was launched 21 months ago.

Now here is  an insight to the reasoning:

audience 72.1 million per month, 46% share of all web video traffic.

While the site has yet to realize a profit – think of the potential with Google behind them:

A search engine for video – with paid ads

Short ads before the more popular videos – think this is not big deal – The most popular video on the site is comedian Judson Laipply’s, “Evolution of Dance”. This has been viewed more than 33 million times since April. NOW think of the advertising possiblities.

A short video with a humorous message that can now be exploited – why not.

Now for Google – 2005 profit – $3.56 billion, notice I stated profit figures not income. Their gain in market value due to the purchase was $2.6 billion. Thie paper value arrived at by taking the share price by the number of outstanding shares – $132 billion dollars. A tidy little investment and this authour believes a wise one. If I were an advertising agency I would be calling Google daily to find out how they are going to allow ads on YouTube and be first in line.

Rick Simmons is a principal at Dinkum Interactive, a firm specializing in online marketing solutions for small and medium sized businesses around the globe. With more than 25 years of experience in advertising and marketing, Simmons has spent the last four years focused on search engine optimization, and other Internet marketing strategies. Reach him at 267-626-9094 or rick@dinkuminteractive.com.