@ AO Media: Did Google Overpay For YouTube?

In answer to the question, “How Much is The New Dotcom Worth?” AO Media panelists noted that it depends, but in unique cases the sky is literally the limit. In analyzing Google’s $1.65 billion acquisition of YouTube, the move made sense for both companies from a number of perspectives. Holding forth on the Paul Deninger, chairman of Jefferies & Company, said “Google saw both an opportunity and a threat. If you believe, as Google does, that this is a major platform and if your market cap goes up the day after deal, it’s not so crazy to spend $1.65 billion.” Ahmet Ozalp, a partner at Atlas Venture, added “YouTube is an incredible platform. They could make some thing very valuable and they’re experiencing the fastest growth of any other company on the internet. Google will make it work.” Putting the amount itself in perspective, the panelists also noted that the deal helps push Google into another area, one that makes it competitive with other content providers. “By that standard, Google could afford to overpay,” said Warren Lee, a partner with Canaan Partners. “They’re judged by a different set of financial criteria.”
Related:
– GOOG-YouTube: Numbers Tell Different Stories; VCs Win