YouTube Purchase Signals Google's Vulnerability: Distribution
Piper Jaffray sent out its reactions to Google buying YouTube in an email this morning:

1) Google secures leadership position in online video.

2) Acquisition valuation can be supported on '07 revenue.

3) Acquisition opens door for Google in social networking.

4) Net positive over LT, but signals Google's vulnerability to newcomers

I have problems with point one. I'll let Bambi Fransisco tell you why:

According to a new video report that comScore Media Metrix will begin offering starting Tuesday morning, 37.4 million unique individuals watched a video on MySpace in July. All told, they collectively watched 1.4 billion videos.

By comparison, the audience on Yahoo watched 812 million video streams, making Yahoo the No. 2 most popular video site as measured by video streams. Yahoo ranks No. 1 as measured by unique streamers (similar to unique visitors), but barely beats out MySpace.

YouTube ranks No. 3, having generated 649 million video streams in July.

Point 2 I can't fathom. Point 3 I would argue that YouTube, while good at enabling a browse-by-similar-interests navigation format to video, is not a true social networking site. A video network that enables uploaders to connect around similar interests, yes. It's certainly a type of a social network. But still. I wouldn't call it a social network.

Close enough for Wall Street I guess...

But what got me writing in the first place was point 4, that the acquisition signaled Google's vulnerability to newcomers.

So - what is Google's vulnerability?

Distribution. Because Google's an ad distribution company, not a search company. The YouTube network is a vast ad distribution channel for when Google gets its video ads up and running.

(I could envision Google buying SpotRunner soon...)

Some may arguing that YouTube is a video CONTENT site. It is... but that's not why NBC signed a deal with them - NBC's looking for distribution, and so is Google.

Plus I've been reading Guy Kawasaki's The Art of Distribution and talking with Pixsy's Chase Norlin ;)

Resources:
MySpace trumps YouTube in video

update: I just hope Google doesn't leave YouTube to rot like they did Blogger... I can't wait to port SEL over to WordPress. Blogger's been wonky for me all morning.

update2 : Tristan Louis hits us with some strong comparisons and says we're not in a bubble: No Bubble 2.0 yet

update 3: is um Blogger ajaxy now or something? this is weird...
Garrett French - MarketSmart Interactive | permalink | +marktd |