The answer is, you might be able to buy YouTube, and some even claimed that it is cheap. However, who would have 1.6B USD lying around, and who would be able to handle all all these lawsuits that will surely follow after the acquisition?
Who else but Google alone?
I still can’t see how a “potential advertising venture” that is yet to generate substantial revenue would be valuated at 1.6B USD. Consider Lenovo bought IBM’s long-established brick-and-mortar PC making business 2 years ago for merely 1.25B USD.
Maybe I am still living under the shadow of previous bubble burst, and couldn’t figure out all the maths of the supposedly “new economy” of Web 2.0.
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Nah, just because they find a buyer at $1.65B doesn’t mean that the purchase isn’t wacko.
As an Australian working with VC’s here in New York has taught me that IQ isn’t a requirement when it comes to negotiating deals like this.
What worse is that some of these insane deals are now making money (eg Myspace/Google adwords deal last month) it’s making it even worse as some people are now justified in their insane decisions.
Cheers,
Dean
Mexuar Corraleta – from click to call in 10 seconds or less, and no client to install, beat that Google. http://www.Mexuar.com See what all the fuss is about.
Dean,
MySpace deal is a bit different, even though I’ll say $900M to put ads on a badly designed social networking website is also outrageous. It was a partnership not acquisition. And can you point out to me that Google will be getting $900M back from advertisement on MySpace?
3 years ago Google offered $30M to buy Friendster and I thought that was stupid. Well, how little did I know…