Innovation Zen

When Google announced that it was acquiring YouTube people immediately started commenting the deal. Some, like Mark Cuban, argued that it was a really bad move from Google’s part. Others celebrated as if it was the victory of online video over traditional media. Several people tried to clarify the reasons behind that decision, some of them with a good bit of creativity. Below you will find two interesting explanations I came across recently:

1. Google business model revolves around the “fair use” of third parties content. YouTube also bases part of its business model on the “fair use” of copyrighted material. Should YouTube lose its upcoming court cases its probable that Google would find itself on a weaker position in front of legal actions. Google, therefore, acquired YouTube to make sure that indirect legal decisions will not affect its own business.

2. Television advertising still dwarfs the Internet. Google declared several times over the last years that it intends to start placing ads print, radio and television. YouTube, on the other hand, is a giant laboratory for video content. What if advertisers could use YouTube to test their ads and fine tune their campaigns with customer interaction before spending millions of dollars on television? Acquiring YouTube could allow Google to enter the traditional media realm, expanding its advertising model beyond the Internet.

In reality it might be early to understand if the move was right or not. Online video is an ongoing phenomenon, and the convergence between Internet and television will probably change the way we interact with video content. Time will tell.