Will Google go up to $600 per share because of YouTube?

November 15, 2006

News: Is this irrational exuberance or what?  Credit Suisse (which had worked on the YouTube deal, but now can cover Google since the deal is done) has an analyst Heath Terry, who set the target price of Google at $600/share (it’s currently at $491.93/share.  Terry explains (see ZDNet):

The YouTube acquisition is certainly not without its own risks. The most significant issue facing Google following this acquisition is the potential for a deluge of litigation concerning copyrighted content on YouTube. A protracted legal battle in the courts could result in millions of dollars of legal expenses and settlement outside the courts is also a possibility. The worst case scenario can be seen in the fates of companies like Napster and MP3.com. Our analysis of the top 100 most viewed videos so far in November indicate that under 35% of these videos (by total views and number of videos) potentially contain contentious copyrighted material. This means that the majority of videos on the site are truly user-generated content. As a result, we believe the impact of Google/YouTube removing copyrighted content may be less than feared. However, it is unclear how much of YouTube’s traffic comes to site primarily for copyrighted content rather than user-generated videos.

Terry’s bet: The monetization of YouTube will outrun the copyright gnats. His price target for Google: $600.

Analysis:  Wow.  The stat on the percentage of user-created material that is the most popular (65% of the TOP 100 videos) is pretty amazing.  If true, it shows the huge potential for ordinary people to find viewers of their works on YouTube.  

NHL hockey on YouTube

November 15, 2006

News:  The National Hockey League became the first professional sport to agree to a deal with YouTube.  The NHL will market their games by showing 2- to 5-minute highlights clips from games on YouTube, within 24 hours of the actual games.  (More from Reuters and NHL)

Analysis: I like the idea.  Other sports should follow suit.  They should also allow fans (or YouTube users) to mash up the highlights to create their own little hockey videos.

Google sets aside $200 million warchest to fight copyright lawsuits

November 15, 2006

News:  The Google acquisition of YouTube was finalized earlier this week.  Although Google paid $1.65 billion in stock to buy YouTube, as a part of the agreement, Google set aside 12.5% of the amount to fight copyright lawsuits (or, in Google’s words, “to secure certain indemnification obligations.”  (More from the Chicago Tribune

Analysis:  $200 million is a sizeable warchest to fight copyright lawsuits.  It’s sort of a dual edged sword, though.  It shows that YouTube is willing to put its money where its mouth is to fight copyright lawsuits and prove its conduct is legal, but it also shows just how large the potential legal risk Google and YouTube estimated for copyright lawsuits.   

The business of stupid videos: Is Stephen Colbert right about YouTube?

November 15, 2006

I will be giving a talk to law students at my school on Wednesday.  The title of my talk is noted above.  We will be discussing this video of Stephen Colbert about the YouTube “ripoff.”  (Warning:  the video contains footage of two acts of stupidity and some graphic violence involving a guy hitting a person on the head with a shovel.)   

If you have any opinions on this video or the following questions, I’d love to hear them:

1.  Why is YouTube so popular among users?  What’s the point of posting silly videos online?

2.  How should major copyright holders, like the movie and music industries, deal with people posting clips of their content without authorization on YouTube?  

3.  Is YouTube really worth $1.65 billion?

UPDATE:  In the “rip-off” clip, Stephen Colbert joked about having Colbert Report clips up on YouTube, even though Viacom, his parent company, asked some to be removed.  Now, ironically, Viacom or the Colbert Report asked that the same video clip in which Colbert makes fun of Viacom and others over the use of his clips to be removed from YouTube.   “Rip-off” is now available on Comedy Central’s site here.