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YouTube’s Rise to Power Pt.3 – Google’s Acquisition

In 2005, YouTube’s biggest potential competition was created, Google Video.  At the same time, Google engineers denounced YouTube’s videos as low-quality and grainy. Not fully comprehending YouTube’s popularity and ease, Google’s engineers missed the mark on their product.

With Google Video, you had to know your video’s codec and the dimensions of the video frame. With YouTube, this was automated for the user and all that needed to be done was to simply click ‘upload’. With this user friendly approach, it wasn’t long before YouTube had officially taken over the online video entertainment market.

The beliefs of the more pessimistic of analysts suggested that YouTube was ready to be sued out of existence. It is debated if Youtube was targeted for acquisition because it was becoming more vulnerable, or because it was becoming more powerful by the day.

Regardless of these costs, YouTube’s success was undeniable and as a result quickly became an acquisition target of major tech companies. Google took a specific interest as it was clear that the video quality offered by Google Video was outmatched by the ease of YouTube. 

In addition to Google, offers rolled in from big names such as Yahoo, Microsoft and News Corp. Acquisition meetings took place at Denny’s restaurant and a deal was soon to follow. 


This acquisition was viewed as a positive step forward. YouTube continued to grow, while dodging looming monetary questions. The company was able to refocus its energy towards executing tasks rather than managing costs. 

Today, YouTube has become the world’s largest video sharing platform. Over time, technological innovation has shifted the platform’s usage, allowing YouTube to steadily monetize its service. Through advertisement revenues, YouTube has been able to create a community

of users who make a living by uploading video content to their channels. 

YouTube’s estimated $70 billion net value far outweighs the initial $1.65 billion purchase. However, it’s true worth goes beyond its valuation as the social impact of YouTube is extensive.




Tune into next week to find out about the future
of YouTube: Beyond the Money.




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