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Google-YouTube: Was it worth $1.6 billion?


(A little something Heather left me to post. UPDATE. I unwittingly truncated the bottom of the post, which I’ve placed below the fold.)

As the mergers pile up, it’s a good time to step back and wonder, yet again, about Google’s YouTube purchase, which really helped set the bar for Web 2.0 prices.

That YouTube remains a phenom is undisputed. But it’s about a year and a half since Google snapped up our little social media whirlwind, and it hasn’t come up with any really brilliant ways to make big big bucks off the thing. Or put another way. The kind of money that’s proportionate to the service’s influence as a capital way to waste time, keep up on pop culture, and make sense of our wacky pols. I.E. as an important barometer of life as we know it.

Sure, sure, we have the standard ad overlay. And the in-line video that you can choose to click on. And we have the standard lip service about not doing pre and post roll ad. Though as Mike Arrington argues, pre and post roll ads can be done right. If Google wants to really be daring.

Instead, we have been waiting for the Answer. In the likeness of Targeting. That’s Targeting with a capital T and that rhymes with C and that stands for cash.

Usually. Or maybe hopefully. Or actually not yet. Because “Buzz Targeting, ” a new ad program that Google recently rolled out doesn’t feel much like targeting to me. Essentially, as a video is “about to go viral” (their words, not mine), advertisers can buy advertise on the video. Huh? Not exactly what I think of when I think of Google, brilliant use of algorithms, and targeting. Unless you call targeting simply putting an ad next to something that’s popular. It brings more to mind, err, TV programs.

Ian Schafer has a great run down on this program and why he calls it “Interesting, Flawed.” Part of his point is that the videos that only videos from YouTube’s content are part of this program. I.E. The professional videos,

“Is this going to be an effort that can command and justify higher CPMs? Or is this just another shortcut to associating ads with ‘cool’ content? We all know the ‘coolest’ videos on YouTube are created by non-professionals…”

That brings up the bigger issue that people wondered about from the beginning about Google’s big YouTube Gooble. What can be done to help advertisers feel comfortable advertising with the really compelling things on YouTube, I.E. the stuff made by folks who don’t have the massive studios in Times Square? Is it Adsense for video? Well, no because you have to stream

1 million videos a month to be part of that program.

Is YouTube, like MySpace just proving too wild for Google to figure out how to make money off of?


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