Google search + You Tube Video = ????
By Jon Fernquest[Introduction | Vocabulary | Article | Reading Questions | Answers]
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Google bought You Tube, a free online video sharing site, yesterday for $1.65 billion dollars.
This should inspire and give hope to people who have innovative new ideas for businesses in Thailand.
Even though the mechanisms for funding innovative business ideas in Thailand may not be fully in place yet, they may be in the near future.
This is the purpose of the Market for Alternative Investments (MAI) founded in 1999 at the Stock Exchange of Thailand (SET).
The big questions are: 1. How is Google going to earn money from it? You Tube has yet to make a profit. 2. How is Google going to solve the problem of rampant copyright violations on You Tube?
Today's article discusses how Google plans to solve these problems.
Reading Questions
Here are some questions to guide your reading (See answers at end):1. How many videos are watched daily on You Tube around the world?
2. Has You Tube been in business for a long time? How long?
3. Why did Google choose You Tube and not another online video company?
4. Why do Google's founders believe that You Tube will be a good fit with Google?
5. What other major Google announcements accompanied the You Tube sale?
6. Why does Google see alliances with movie companies as strategically important?
7. What system is Google putting place to make copyright infringement more difficult?
8. How will movie companies make money from clips they put on the site?
9. What is Google's vision for online video in the future?
10. How much did You TUbe receive in its initial venture capital funding? Who funded it? How long ago was this?
11. How will Google pay $1.65 billion for You Tube?
12. Has Googles' own video sharing service been successful?
Bangkok Post Article: October 11, 2006
Google snaps up YouTube for $1.6bn
GLENN CHAPMANSan Francisco - Google bought hot young video-sharing website YouTube on Monday in a $1.65-billion stock deal that the companies proclaimed was a natural for the evolving Internet.
The acquisition married Google's online search prowess with a video-sharing site renowned for devotees but not revenues.
"With Google's technology and search leadership we will have the resources to take our services to the next level,'' YouTube co-founder Steven Chen said during a telephone press conference with Google executives.
"We believe this is just the beginning.''
YouTube soared to online popularity after its launch in February 2005. The company claims that more than 100 million videos are watched daily by visitors to the free website, which features content ranging from silly home videos to snippets of Hollywood films, television shows and concerts.
Google said that it was drawn to YouTube because it was the clear market leader and had put together a "remarkable team'' in a short time.
"We think one of the keys to comprehensive search experience will be video,'' said Google co-founder Sergey Brin. "On the whole it is hard for me to imagine a better fit with another company. YouTube really reminds me of Google just a few short years ago.''
The blockbuster deal was announced on the same day that Google and YouTube unveiled agreements with major studios to post copyrighted music videos online.
The agreements were seen as efforts to pre-empt accusations of rampant copyright infringement at the online video-sharing sites and enlist studios as potential beneficiaries of the trend.
The pacts will rely on advertising to generate revenues by encouraging users to click on companies' links alongside the videos.
YouTube was putting new systems in place to "fingerprint'' copyrighted material so it could be tracked, said YouTube co-founder Chad Hurley.
Google and YouTube engineers already have dozens of ideas for handling ads, searches and videos, according to Google chief executive Eric Schmidt.
"Most people believe that this is just the beginning of a video Internet revolution,'' Schmidt said. "I think there is a whole new ecosystem and we are expecting to be a part of it.''
"Our community has played a vital role in changing the way that people consume media, creating a new clip culture,'' Hurley said.
YouTube will continue to operate independently with its headquarters in San Bruno, California, after the acquisition is complete, according to Google.
In Silicon Valley tradition, YouTube was launched on its meteoric rise from a garage. In its first foray seeking external funds, the company raised $3.5 million from Sequoia Capital in November 2005. In the newest deal, though, Google will pay for YouTube with shares of its own high-flying stock.
By purchasing YouTube, Google would be able to apply its proven prowess for generating revenue through online advertising.
YouTube meanwhile will provide Google traction in the online video-sharing market, where Google's own video service has failed to take off.
"This is the next step in the evolution of the Internet,'' Schmidt said. "It is a natural next step.''
The deal is expected to be culminated by year-end provided it clears regulatory requirements.
Meanwhile, Google Video "will not go away now, or ever,'' Schmidt said. AFP
Vocabulary
Market for Alternative Investments (MAI) - (See MAI's website and London's Alternative Investment Market (AIM))
Stock Exchange of Thailand (SET) - Thailand's stock exchange (See Wikipedia)
snaps up - grabs (here is means "buys quickly")
video-sharing site - a site that people can use to share their videos with others for free (See Wikipedia for comparison)
proclaimed - annnounce in a formal way
renowned for - famous for
devotees - people who love it and are devoted to it
silly - funny, ridiculous, makes you laugh
home videos - informal videos you make of famil and friends
snippets - a small part taken from (snipped, cut from) a larger video
a better fit - will work together better
a blockbuster deal - a very, very big deal
unveiled - show for the first time (a "veil" hides something, like a face)
pre-empt - do something to prevent a future problem (proactively prevent a problem)
rampant - doing in an out of control way
copyright infringement - violating the ownership rights over a video by copying it and/or claiming it as your own (See Wikipedia)
enlist - get someone to help you
beneficiaries - people who benefit from it
fingerprint copyrighted material - put an identifying mark to mark copyright ownership of a video
tracked - follow and check what happens to it and who uses it
an ecosystem - a self-contained system with its own rules (an ecosyetem in nature is a natural system of plants and animals that live together, for example, in a forest)
meteoric rise - rise in importance very quickly and spectacularly (like a meteor frm outer space)
foray - to go out looking for something, here looking for funding
high-flying stock - very popular and highly valued stock
prowess - great ability
provide traction - make it possible to walk, to participate in a business ("traction" means your feet don't slip so you can walk)
Answer Key:
1. How many videos are watched daily on You Tube around the world?
100 million. That is 100,000,000 every day.
2. Has You Tube been in business for a long time? How long?
You Tube has not been in business for very long. The site was launched in February 2005, so it is 1.75 years old (21 months).
3. Why did Google choose You Tube and not another online video company?
a. You Tube was the market leader.
b. You Tube built a company with a talented team of workers quickly. Meaning that the human capital and management of the team is itself a large part of the company's value.
4. Why do Google's founders believe that You Tube will be a good fit with Google?
The founders of Google believe video will soon be an important part of search and that You Tube reminds them of their company a few years ago.
5. What other major Google announcements accompanied the You Tube sale?
Agreements with major movie companies to post their copyrighted music videos online.
6. Why does Google see alliances with movie companies as strategically important?
Google wants to "pre-empt accusations of rampant copyright infringement at the online video-sharing sites and enlist studios as potential beneficiaries of the trend."
7. What system is Google putting place to make copyright infringement more difficult?
It is putting an identifying mark or "fingerprint" on on videos that will accompany that video everywhere that it goes. This should at least prevent unscrupulous people from using copyrighted videos publicly or reselling them.
8. How will movie companies make money from clips they put on the site?
The free video clips that movie companies contribute will have click through advertisements next to them. ("The pacts will rely on advertising to generate revenues by encouraging users to click on companies' links alongside the videos.")
9. What is Google's vision for online video in the future?
Google wants to create a new ecosystem, a new video clip culture and community. They already have numerous new ideas for ads, searches, and videos.
10. How much did You TUbe receive in its initial venture capital funding? Who funded it? How long ago was this?
You Tube received only $3.5 million from the venture capital firm Sequoia Capital in November 2005, less than a year ago.
11. How will Google pay $1.65 billion for You Tube?
It will pay with shares of its own high-value stock.
12. Has Googles' own video sharing service been successful?
No, that's why they're buying You Tube.
