A Random Thought on GooTube

Was Google's acquisition of YouTube a defensive move to take out a competitor? Will Google care if they kill YouTube?

There's been much sturm und drang about the Y! peanut butter memo this weekend. One of the main points of the memo is that YHOO has similar products in the same space that compete against each other. Commentators have mentioned that one of GOOG's strengths is that they don't have multiple products in the same space.

A little bell went off in my head. When the YouTube acquisition was announced GOOG CEO Eric Schmidt went out of his way to say that Google Video "is not going away."

A few points:

-The bump in GOOG stock due to the YT acquisition means that YT was essentially free.

-There's no way in hell Google Video was beating YouTube in the marketplace.

-GOOG would be hurt if YouTube were owned by MSFT or YHOO

-Google is a company that thrives on technology solutions. YouTube has no proprietary technology (the interesting tech is Adobe's).

-There's a snakepit of trouble with YouTube vis a vis copyright issues (especially once people realize that Progressive Download!=Streaming).

-An unfavorable legal judgement against YouTube would hurt all online video efforts (see A&M RECORDS V NAPSTER).

I'm not suggesting Google is going to try to kill YouTube. I just suspect that if it doesn't work out, Google won't shed too many tears.

Erik Schwartzgoogle, yahoo, youtube