Thursday, October 12, 2006

It's good to be Google: What some people missed about the YouTube acquisition

Now that the hubbub surrounding Google's acquisition of YouTube is starting (maybe?) to die down, it's time to take a closer look at how this move changes the Internet landscape.

First off, let's look at Google's stock price since Friday when rumors of the acquisition started flying around the web (props to TechCrunch for breaking the story). On Friday Oct. 6, GOOG closed at 420.50. On Monday Oct. 9, when pretty much everyone knew the acquisition was going to be announced, GOOG closed at 429 - an increase of about 2%. Doesn't sound like much until you look at Google's market cap of $130 billion. A 2% increase equates to $2.6 billion - a full $1 billion more than Google paid for YouTube. One could then argue that Google's acquisition of the biggest web phenomnenon since MySpace was essentially free. It's good to be Google.

Next up: Google as the next Yahoo.

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