Come into my parlour...

 

 

A n overwhelming growth of 267.2% in net profits and a market capitalisation in excess of $100 billion saw Google outperform all competitors in the business of search engines during 2005. And after becoming the only search engine to register an appreciation in market share (from 37.3% in 2005 to 44.1% in 2006), it went ahead and gobbled up the year-old ‘magical garage start-up’ YouTube – a leading video sharing engine – for $1.6 billion. A look at the heavyweight’s activity over the past month puts all ‘myopic’ doubts to rest. Google signed two deals (supported through an advertisement-supported revenue sharing model) on 9 October 2006 with Warner Music Group and Sony BMG (which allows Google surfers free access to an extensive music video collection). And if you were hoping for the third – this is it!

Despite critics calling the deal ‘illogical’, it actually provides impetus to Google’s advertising revenues (a source that contributes to 98.86% of its total revenues). Though critics are also shouting loud over the law suits that are bound to follow (because of YouTube’s rampant broadcasts of copyright videos), the fact that YouTube controls more than 50% of the online video streaming market and its acquisition only means a ‘definite’ 72 million customers on a monthly basis to start off with, will certainly make this a deal worth $1.65 billion for Google!