Big news over the weekend was YouTube’s $1.6 billion, all-stock acquisition by Google.  There’s much debate on whether this was a good deal for Google, or not.

I think Google paid a reasonable price for YouTube.  In addition to its future cash flows, Google must have looked at the potential of someone else (Yahoo!?!) buying YouTube, and what that would have meant for video search and video-related ad syndication, which will both undoubtedly be critical for Google.  Combined with YouTube, Google will now carry about 60% of all video traffic on the internet.

Baris looks at it from a "purchasing searches" perspective, which I also agree with.


UPDATE: No one’s doubting that YouTube and its investors got a good deal, though. 🙂

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