A notable point regarding yesterday’s major event was made by William Blair analyst Troy Mastin, who wrote in a report that the deal marks the first time Google bought a company for its traffic rather than for its technology. Mastin noted that “we suspect some observers may view (that) as a mistake and characterize the price tag as unjustified.”
Still, Mastin believes “the acquisition looks much more palatable” if viewed as a means of effectively guaranteeing the acquisition of YouTube’s fast-growing traffic volumes. He also views the acquisition as a defensive gambit that prevents Yahoo or Microsoft from acquiring or cutting deals with YouTube.
Mastin also voiced concern that copyright holders will start filing infringement lawsuits now that YouTube is owned by a “deep-pocketed public corporation,” but, in light of the content-distribution deals YouTube and Google have struck recently, I am increasingly skeptical that such lawsuits will proliferate.
I think Google and the world of creative content — music, television, and movies — are coming to a mutual understanding, one that recognizes the inherently symbiotic nature of their relationship and allows for a reconciliation of business interests. I don’t think we’ll see a replay of the destructive misunderstandings that took place involving file-sharing networks and the recording industry.
The worlds of digital content and digital distribution have learned a lot about each other, and about themselves, since then. The same mistakes will not be made again.