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    Google just bought YouTube for about 6.5 billion dollars. People say that money can be made back from advertising, however, it will take hundreds of years to get that amount of money back. Therefore, why did they buy it and how could they get profit?

    Question #72270. Asked by kaung30. (Nov 13 06 5:54 PM)


    bobthebirder

    		I think it would be profitable by mixing youtube with google video. But, I can see where your going with the advertising thing. It would take a while, but there has to be a way that Google's planning to use to get the money faster.

    Nov 13 06, 6:02 PM
    DukeDawson

    		Kaung, I believe the correct purchase price was closer to 1.5 billion.

    Nov 13 06, 9:17 PM
    What-A-Mess

    		My Way News - Google Snaps Up YouTube for $1.65B

    In Google stock. No cash.

    http://www.google.com/search?client=firefox-a&rls=org.mozilla%3Aen-US%3Aofficial_s&hl=en&q=youtube+purchase+price&btnG=Google+Search

    Nov 13 06, 9:51 PM
    kaung30

    		sorry, however, how could they get the profit back in a short period of time?

    Nov 14 06, 1:46 AM
    What-A-Mess

    		Easily!

    Nov 14 06, 2:32 AM
    SOTHC

    		According to http://news.independent.co.uk/business/news/article1948273.ece

    Advertising revenues in the UK for the internet search engine Google will easily surpass ad sales at Channel 4 this year, the broadcaster's chief executive has said.

    Channel 4's Andy Duncan said Google would take in £900m from the UK ad market in 2006, compared with £800m at the TV group.


    Nov 14 06, 2:51 AM
    Baloo55th

    		Hang on - they haven't spent any money, have they? A takeover financed by stock issue works by the people formerly owning a company deciding they would be better off owning someone else's shares, and swapping their shares for new shares in the other company. The company doing the takeover then has more shares issued that have to have dividends paid on them, so they have to be sure they can run the new acquisition profitably or else the shareholders will be less than happy. Sometimes this method is used in not quite as successful a way, shall we say, being charitable. A company (Corton Beach) from my town expanded rapidly in various fields by stock-financed takeovers and then went bust. I'm not sure if there was bad luck, incompetence or something else involved.

    Nov 14 06, 7:57 AM

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