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Google Search Buys Online Video Sharing Web Site YouTube

The face of the Internet continues its dramatic evolution, as more and more High Speed Internet users are choosing the Web as their destination of choice to share and view videos. To keep up with the pace, Internet search giant Google Inc. purchased online video start-up YouTube for a whopping $1.65 billion earlier this week.

This deal, which is the most expensive acquisition over Google’s entire eight-year history, will pair YouTube’s growing popularity as leading online video sharing Web site with Google’s expansive technological resources.

YouTube, Google Together - What’s to be gained?

According to the media and industry insiders, both companies stand to benefit greatly from the merger.

With this acquisition, Google has jumped into the lead position in the online video sharing market. However, nabbing first place isn’t Google’s sole objective. The company also hopes to broaden its online advertising revenue by tapping into YouTube’s ever-growing popularity as one of the most visited Web sites out there. It is also speculated that Google will use this merger to expand its advertising activities beyond simple text ads, to include even greater amounts of online video advertising.

Of this merger, Google’s Chief Executive Officer Eric Schmidt stated, “This is the next step in the evolution of the Internet.”

In addition to its billion-dollar payday, YouTube will now have even greater resources to expand and grow features of the Web site.

YouTube – founded in February of 2005 – is a consumer media company where individuals can watch and share original video’s worldwide through the Web. The company has estimated that close to 100 million of its videos are watched daily.

Under the terms of the agreement, YouTube will retain all of its 67 employees, including its founders Chief Executive Officer Chad Hurley and Chief Technology Officer Steve Chen, and remain at its headquarters in San Bruno CA. The company will continue to operate independently of Google.

What the Critics Have to Say

Some critics speculate that the merger could open Google up to copyright infringement lawsuits. YouTube currently has one such lawsuit pending. However, both sides feel that this is of little concern. Although copyrighted material has made its way onto the Site, YouTube was designed to share original videos. YouTube has taken down copyrighted materials when notified, and is working to develop programs to recognize copyrighted materials.

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