October 11, 2006

Bubbling Dotcom Bubbles

Your snoopy wiredhound was caught napping while Google Inc. was gobbling up YouTube Inc. for a cool USD1.65 billion.

This is the most expensive acquisition in Google's eight-year history and it really shook up the dotcom landscape.

After Monday's coup by the Internet's leading search engine company, some are rubbing their eyes and wondering whether this is the beginning or the end of the dotcom craze.

Certainly it brings back memories of the dotcom boom in the late 1990s. So has the dotcom boom come back with a vengeance?

If we take Google CEO Eric Schmidt's word for it when he told investors that YouTube would be "one of many investments" the company plans to make in the video field, then be prepared for more splashy news in the near future.

Last year, Rupert Murdoch bought MySpace - a hot social networking site popular with teenagers - for USD580 million and got tongues wagging about the acquisition.

The way things are moving, online video seems to be the next big thing 'cause there's a huge market out there for the taking.

As YouTube co-founders Chad Hurley and Steve Chen had proven, their video site turned out to be a cultural phenomenon. It appeals to the young.

Born August last year in Hurley's garage, YouTube captured about 2.8 million users a month but today its audience had shot up to 72 million users, according to a BBC news report.

Is this the theoretical "Long Tail" effect that Chris Anderson wrote about in his book whereby the future of entertainment is in the millions of niche markets at the shallow end of the bitstream?

Here's a quote from YouTube's CEO Hurley reported in the San Francisco Chronicle:

"We're in the middle of a shift in digital media entertainment. Users are now in control of what they want to watch and when they want to watch it. They decide what rises to the top, what's entertaining."

Here's a hypothetical USD1.65 billion question to Yahoo and MicroSoft: What're you gonna do about this Google-gobbling? You ain't gonna take this lying down?

1 comment:

Anonymous said...

Yes, really.


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