Beet.TV Bulletin: Google Gobbles YouTube…Why is This a Smart Buy for Google? Forrester’s Charlene Li Has Figured it Out

By on 10/09/2006 11:02 AM @

The Wall Street Journal (subscription) just (4:25 PM EDT) issued an alert stating that Google has acquired YouTube for $1.65 billion. 

To understand the market dynamics of why this makes a lot of sense, get the download from Forrester’s Charlene Li.  She thinks YouTube has gotten it right in many ways, specifically as an advertising platform.  She says that YouTube has created communities around clips — a great enviroronment for contextual advertising.  She outlines some of these points in a recent post.

I spoke with Charlene about YouTube in Palo Alto in July.  She explains why the YouTube business model works.

Here’s the Valley’s Latest Zillionaire, Chad Hurley, Co-Founder of YouTube — I caught up with Chad at Stanford in July. 

BTW: Congrats to WSJ Google-beat reporter Kevin Delaney for breaking this story.  There sure were a boatload of skeptics out there in the blogosphere. 

Google Inks Big Music Biz Deal — In addition to the mega deal with just announced for YouTube, Google continues building alliances for more video content.  They just announced a big music business deal with Sony BMG Music Entertainment and Warner Music Group to distribute music videos.  The videos will be distributed both in an advertising-supported model and via pay-per download.  Here’s a report from The Financial Times.

Andy Plesser

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