The Greatest Tech Acquisition of All Time

YouTube may go down as one of the greatest acquisitions of all time.

On October 9th, 2006, Google announced the news. They had agreed to acquire YouTube for $1.65 Billion.

People thought this was absurd.

Mark Cuban wrote a blog post saying Google is crazy. He specifically brought up the legal liabilities the company would face with video-first software.

Do you think he regrets that one?

In 2006, the world wasn’t on the internet constantly. The first iPhone was sold in 2007. People rarely had a web browser on their mobile devices. Only 30% of all households worldwide had a desktop computer in their home.

I’m willing to bet a lot of these were from the United States and the United Kingdom.

Google made a bet on something big.

They saw the future before we did and they went with their gut feeling. The result should be in tech acquisition history books. Google ($GOOG) reported its last earnings in September of 2022, where they have reported YouTube revenue separately since 2019.

In Q4 of 2022, YouTube’s ad revenue came in at $7.07 Billion. That’s a whopping 7x ROI in one quarter.

They acquired YouTube over 15 years ago.

Running a media giant like YouTube has its setbacks, like the cost of running data centers and bandwidth for the entire world. On top of this, competitors like Instagram and Tiktok are coming for YouTube’s grasp on short-form content.

YouTube recently announced they are opening up monetization for YouTube shorts. A big change in its attempt to take down Tiktok.

A study has been rounding the internet over the past few days of just how much YouTube young children watch.

The study shows that one-in-five teens are “almost constantly” on YouTube. This could be active watching, like a Mr. Beast video, or passive listening, like video gaming to Lo-Fi beats.

No matter what they’re doing on the media platform, YouTube is still giving out ad revenue and making money off ad revenue.

There’s also a fact we haven’t mentioned yet. YouTube is the second biggest search engine in the world behind Google itself.

It seems insane not to be on YouTube if you’re a content creator. You don’t even have to recreate the wheel. Take your blog posts, your articles, or your tweets and make them into a script.

This will take a bit of work, but video content consumption is here to stay.

We should jump on the arbitrage while we can.

Published on: January 7, 2024