Yahoo to Google: what you paid for YouTube is "still crazy"

By on March 28, 2011, 2:33 PM
Speaking on a panel at the Global Technology Symposium in Menlo Park on Friday, Steven Mitzenmacher, Senior Director of Corporate Development at Yahoo, took a swipe at Google while discussing acquisitions. First he said that his company went through a couple of years where acquisitions weren't on the agenda but then he added that Yahoo was "gearing up for a very big year" and that "we've come out now…guns blazing," adding that executives around the company "want to do more."

That being said, Mitzenmacher believes that Yahoo's biggest competitor, Google, is spending way too much on acquisitions. Specifically, he takes issue with how much the search giant paid for YouTube, according to The Wall Street Journal:

Mr. Mitzenmacher, who was on a panel with deal executives from Google, LinkedIn and Adobe Systems, took a swipe at Google's 2006 purchase of YouTube for $1.6 billion, saying the price is "still crazy."

Sitting next to him, Google's Neeraj Arora dismissed the notion, saying YouTube "has paid itself back."

Mr. Mitzenmacher then pulled out a phone to look up a news report from last year in which Google CEO Eric Schmidt said the site wasn't yet profitable. Users upload 35 hours of video to the site every minute, making it costly to maintain.

In November 2006, Google bought YouTube for $1.65 billion. Two years later, Google CEO Eric Schmidt admitted the company paid a $1 billion premium for the video sharing site. "I believe YouTube was worth somewhere around $600 million to $700 million," he said in May 2009.

Four months ago, we learned that YouTube was seeing 35 hours of video uploaded every minute. The costs for running the site continue to grow, so it's really not surprising that Google still hasn't made back all of the money it has invested in the site.

Google is still working hard on improving the service, and even makes other acquisitions to do so. Most recently, the Mountain View acquired Green Parrot Pictures so that it can integrate tools that help make videos look better, reduce required bandwidth, and improve playback speed. YouTube also recently revealed that it plans to grow its staff by 30 percent this year.

User Comments: 12

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negroplasty negroplasty said:

Yahoo, you already lost the battle, take what insignificant blows you can. Also, ever hear of goodwill in terms of acquisitions?

BlindObject said:

Jelly and mad sandwich.

Omnislip said:

Google to Yahoo: You still suck.

Wendig0 Wendig0, TechSpot Paladin, said:

Youtube would have been much better without Google imo, but what's done is done. There was far less censorship before Google took over.

djonsun said:

@Wendi I agree

Guest said:

Misery loves company.

And Yahoo is miserable...

edison5do said:

Isn't yahoo in microsoft hands already!, yahoo was eating dust, and now what? are they going to critice google!?...... maybe they want to sell to google... :P

supportme said:

Google to Yahoo: You did not allow a Microsoft because their offer was crazily over priced. :P

lchu12 lchu12 said:

"Mr. Mitzenmacher then pulled out a phone and googled a news report from last year..."

supertech supertech said:

I'm not going to even read this article, the subject alone says enough...

Where is Yahoo in comparison to google... ummm... going nowhere, no interesting new products, stocks plummeting, Microsoft attempting to buy them several times... Yahoo's market share is shrinking daily and they are not really improving their situation.

Do a search for something in google, then yahoo...... would you use yahoo again after the poor search results?

Google has the #1 search engine, #1 video site (youtube), top3 mobile OS, top3 free email services, google voice, calendar, docs.... so many interesting projects they are always pumping out.

Ghosty Dog Ghosty Dog said:

Go Google

Google = good

Facebook = evil

treetops treetops said:

Thank god yahoo did not take over youtube, they would over sensor it to the brink of its destruction.

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