Question

YouTube was purchased by Google in 2006. Please describe how YouTube handled their finances and the state of their stock before they were purchased. Also, please explain how the acquisition took place. Please provide a typed 1000 word response with sources.

Answer 1

YouTube was one of the fastest growing websites, outpacing even behemoths like MySpace. As of a July 16, 2006 survey, 100 million clips were viewed daily with an additional 65,000 videos uploaded per 24 hours.

With YouTube in the Top 5 most viewed websites, an acquisition like this would significantly boost Google’s advertising revenues - the “social networking” aspect of YouTube drives this acquisition

Sergey Brin, Google's co-founder and president of technology. "Video is a great medium for advertising,"

More than half of the online video watching market would be controlled by Google, similar to the internet search traffic that the company holds.

Google paid $1.65 billion to the YouTube owners

217,560 shares, and restricted stock units, options and a warrant exercisable for or convertible into an aggregate of 442,210 shares, of Google's Class A common stock

The stock price was averaged over 30 days. The total amount issued excludes $15 million provided to YouTube between the announcement and the close. 12.5% of the transaction will be held in escrow for a year to cover "indemnification obligations."

YouTube was to remain a separate service under its own identity for the near future, though YouTube search results may include Google Video clips, and vice versa.

¡If Google complies, it risks angering YouTube's users, many of whom want their identity protected and some of whom undoubtedly visit the site in hopes of viewing leaked or copyrighted material.

¡If it doesn't, it could frighten advertisers about identifying their brands with unknown user-generated content and concern regarding exposure to copyright suits.

Google offer to acquised You tube at the $ 1.65 Million. So this is the full process of acquisation of You tube by Google.