Google Buys YouTube. Now What? - Good Idea or Bad Idea?

If Google’s decision to purchase YouTube is a bad one, then it’s not the only big company with bad judgment. The rumor mill says that YouTube has had several other suitors over the past few months, including Microsoft, Yahoo, News Corp. (owners of MySpace), and more. It’s the price that Google paid that has many analysts shaking their heads. It reminds far too many of us of the boom days shortly before the dot-com bubble burst. Could this be a sign that we’re in the middle of another bubble just waiting to explode?

Then again, it really is hard to calculate the value of such a young technology upstart. Indeed, at least one venture capitalist has likened such an analysis to basically a crap shoot. Google saw significant synergies between itself and YouTube, which it believes meant the video sharing site was worth $1.65 billion in stock. Eric Schmidt and Google co-founder Sergey Brin have both said that YouTube’s founders and company remind them of Google itself just a few short years ago.

So if they share a vision, what does that vision look like? Well, for openers, imagine searching Google for help with a “plumbing toilet flusher” and finding a how-to video on YouTube. Or how about doing research for a vacation to Hawaii and finding some home videos taken by tourists and posted online? Those are just some of the possibilities.

Looking at the bigger picture, does this mean that online video is the wave of the future? Certainly many other online video companies hope this will inspire a shopping spree. Mary Hodder, CEO of Dabble, a site that functions as a sort of TV guide for Internet video, notes that the deal “causes people to look at our value, and who has what video where. All of a sudden lots of people who didn’t get Dabble are popping us and realizing the value we provide with search and social discovery.” Meanwhile, Schmidt insists that this is the next step in the evolution of the Internet. If Google can make it pay while dodging copyright lawsuits, he just might be right.