Google reportedly talking with YouTube on possible takeover

09 Oct 2006

(Associated Press via NewsEdge) Google is in talks to acquire the popular online video site YouTube for about $1.6 billion in cash and stock, according to published reports.

Google and YouTube are still at a sensitive stage in the discussion, The Wall Street Journal and The New York Times reported on their Web sites, citing unnamed people familiar with the negotiations.

The blog TechCrunch had reported on rumors of the acquisition talks. Google and YouTube officials declined comment.

Analysts said a Google acquisition of YouTube would make sense for both companies if the reported talks lead to a deal, especially considering Google's $10 billion in cash on hand.

'It's damn cheap for a company that already has a global presence,' said Trip Chowdhry, an analyst with the San Francisco-based Global Equities Research. 'YouTube's brand identity is no less than Google's and is no less than Coke's.'

As YouTube's popularity continues to soar, she said, Google can help make sure the site's infrastructure can keep pace.

The acquisition would also immediately propel Google to the top of the online video heap. YouTube eclipsed traffic on Google's video site in February.

By July, the number of monthly visitors had grown to about 30.5 million, compared with 9.3 million for Google Video and 5.3 million for Yahoo Inc.'s Yahoo Video, according to Nielsen/NetRatings.

YouTube users watch more that 100 million videos daily.

© 2006 The Associated Press

© 2006 Dialog, a Thomson business. All rights reserved

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