I guess it is a great thing…

I spoke to a friend Thursday when the rumor just started. We concluded that the acquisition is all about getting the biggest chunk of the market, or to some extent the whole market. I do not think it has anything to do with what YouTube is actually doing. This is purely a corporate strategy from Google to secure its position as the number one player on the user-contributed video market. I haven’t seen any arguments so far that that market is worth that kind of money, but then again no one has really shown me the numbers.

Is the market that big? I have no idea. I doubt it, at least as of today’s form. It is big in the sense that everyone is talking about it, so the acquisition is probably correct from short-term perspective.

User-contributed media is the flavor of this year. I admit I am doing my fair share of it in my work on inthefieldONLINE.net and Ajgar.com. But what is it all about really? Think of it as the IT software business reality show. It is purely based on the entertainment value. Will it change? I think so. It has to. I do not think it is sane to continue down the track, especially as this kind of media is moving towards news. Today’s form of user contributed media contains a lot of child deceases which needs to be cured in order for it to be really useful for media companies. Reputation systems, copyrights and costs are all topics that are too quickly discarded. We will see more and more substantial content, and the same development as the blogosphere went through, the total sphere of user-contributed media will have to go through. This especially requires new business models as such SixApart changed the business model of blogging. i have previously written a lot of entries on the topic:

• The Future of the New Improved Media
• Comments on the Future of Citizen Media
• Credibility and copyrights in the New Improved Media

Back to YouTube. Is YouTube today worth $1.6 billion? Maybe, maybe not. I think the question is as simple as that. You need to look at the bigger picture, but also have a more conceptual discussion of where we are heading with this whole sphere. YouTube are worth $1.6 billion for Google and almost that to Yahoo in their positioning game here in the valley. More importantly, it is a sign that Google is turning into the same strategy as Microsoft have been accused of.

Definitely, the game will be about Facebook. What a ridiculous acquisition price will we see then… The stakes just got bigger… maybe David Hornik will be right after all – The Bubble 2.0 is coming. The acquisition prices are not really sane anymore.

I now hope that the fortune wheel of the valley doesn’t start to spin too fast…

Note: The Swedish company bubblare.se is an excellent example of how to still compete in this saturated market with a focus in the business. They apparently have some statistics showing they are really a good competitor on the market in Sweden. It is also an example of the importance of language modulisation in the local market. Even in big market such as Japan language plays an essential role. I spoke to a Japanese friend the other day, who told me that Japanese kids generally cannot read English well so they prefer Japanese sites. Give them web/mobile search in their native language as well as the interface. This is especially important for user-contributed media sites. How good will they be able to do if they can’t search for the content nor understand how to submit? Even better is that you can do this via cellphones now as of NeoKeys. I met them a few weeks ago and they really have a cool product. It is really cool and the right as well as the necessary way for the future.