Google buys YouTube for $1.65 billion US
Last Updated: Tuesday, October 10, 2006 | 9:03 AM ET
CBC News
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Internet search leader Google Inc. made a giant leap Monday into the burgeoning online video industry by snatching up YouTube Inc. for $1.65 billion US.
The all-stock acquisition unites one of the internet's marquee companies with one of its rapidly rising stars.
The price makes YouTube, a still-unprofitable startup, by far the most expensive purchase by Google during its eight-year history.
In this March 2006 photo, YouTube co-founders Chad Hurley, 29, left, and Steven Chen, 27, pose with their laptops at their office loft in San Mateo, Calif. Google Inc. announced Monday it snatched up YouTube Inc. for $1.65 billion US.
(Tony Avelar/Associated Press)
"We are natural partners to offer a compelling media entertainment service to users, content owners and advertisers," said Eric Schmidt, Google's chief executive officer.
YouTube will continue to retain its brand, as well as all 67 employees, including co-founders Chad Hurley and Steve Chen. The site was launched in February 2005, using Macromedia Flash technology to display video content submitted by a growing community of members.
CBS, Universal, Sony ink separate deals
The deal comes on the same day as YouTube, one of the top video-sharing websites in the world, announced agreements with CBS, Universal Music Group and Sony BMG Music Entertainment to allow video clips and music to be featured on the site.
"YouTube is committed to balancing the needs of the fan community with those of copyright holders," YouTube CEO Chad Hurley said in a statement.
The arrangement with CBS allows for short videos from news, sports, primetime programs as well as Showtime to be shown. CBS said it will also offer brief clips from popular series such as Survivor and mini-previews for some of its new fall shows.
New technology
The network will also test new technology that will help it find copyrighted content on YouTube and remove it. CBS will retain the capability to keep the copyrighted material on the site and share revenue from advertising that appears alongside the content.
Universal Music Group confirmed that YouTube will have access to thousands of music videos, and artists will be compensated for any musical content that users decide to incorporate into their videos.
Sony BMG Music said it will also make video content available on the site and permit YouTube users to include some songs from its catalogue in their amateur videos.
Sony BMG Music will share ad revenue with YouTube for all videos that integrate any audio or video from the Sony library.
YouTube made a similar pact with Warner Music Group a month ago.
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