Google buys YouTube for $1.65b

10 Oct 2006
00:00

(Associated Press via NewsEdge) Google is snapping up YouTube for $1.65 billion, brushing aside copyright concerns to seize a starring role in the online video revolution.

The all-stock deal unites one of the Internet's marquee companies with one of its rapidly rising stars. It came just a few hours after YouTube unveiled three separate agreements with media companies to counter the threat of copyright-infringement lawsuits.

The price makes YouTube, a still-unprofitable startup, by far the most expensive purchase made by Google during its eight-year history.

Last year, Google spent $130.5 million buying a total of 15 small companies.

Although some cynics have questioned YouTube's staying power, Google is betting that the popular video-sharing site will provide it an increasingly lucrative marketing hub as more viewers and advertisers migrate from television to the Internet.

'This is the next step in the evolution of the Internet,' Google CEO Eric Schmidt said.

YouTube will continue to retain its brand, its new headquarters in San Bruno and all 67 employees, including co-founders Chad Hurley and Steve Chen.

Meanwhile, Google will continue to run a less popular video service on its own site.

The deal is expected to close before the end of the year.

© 2006 The Associated Press

© 2006 Dialog, a Thomson business. All rights reserved

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