Got a Spare Billion? Buy YouTube August 27, 2006
Posted by Steve in : Weblog , trackbackAs a church leader, I am fascinated by the incredible migration of time and people’s attention to the social networking sites and the personal film clip sites like YouTube. What is it in our human nature that drives people to spend hours on the computer in social networking sites? So imagine my reaction when I read an interesting article today looking at what YouTube might be worth — it estimates its current market value based off a Sony acquisition of a tiny rival could be in excess of $1 billion…….
“The viral video space is so hot right now; it’s like Hansel from the movie ‘Zoolander,’” said Aram Sinnreich, managing partner of RadarResearch, referring to the 2001 comedy about competition in the modeling business. “I wouldn’t be surprised to see (online video market leader) YouTube receive a bid of $1 billion. Whether the company is worth it is another question.”
Marshall Kirkpatrick at TechCrunch puts the worth of YouTube even higher:
However, the Grouper acquisition price is out of whack when compared to other recent video acquisitions. US Comscore data says Grouper had about 542,000 unique visitors in July 2006, compared to YouTube’s 16 million. Viacom’s recent acquisitions of iFilm (December 2005, 3.3 million U.S. uniques) and Atom/Shockwave (August 2006, 1.3 million U.S. uniques) for $50 million and $200 million, respectively suggest a per-unique-visitor valuation of $15-$20. Grouper’s per-unique-visitor valuation, by comparision, is roughly $70 - $120, depending on whether you look at June or July 2006 data.
It’s hard to use Comscore data for meaningful analysis as it doesn’t necessarily reflect total videos uploaded or viewed, and doesn’t reflect videos embedded on third party sites. I also only have U.S. Comscore data. However, noting those issues, the $65 million valuation on Grouper suggests a YouTube valuation of around $2 billion.
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