Thursday, November 16, 2006
Google fears copyright infringement
Google fears copyright infringement
Google bought YouTube just a few weeks ago but is already starting to feel the heat from Youtube’s content. The site, youtube.com, offers free video hosting to uploaders and the ability to view all the videos uploaded to viewers. The videos are added entirely by other people, not YouTube itself.
This practice has led to the problems Google is facing today. YouTube offers many TV shows, movies, and other revenue generating content for free. When Google considered buying the video site, it knew that because of its large value, it may be target of many copyrighting lawsuits.
Google has withheld $200 Million from the purchase price in order to cover possible copyright charges from content producers. Youtube was largely free of lawsuits because the company was a startup with very little cash. Google is sitting on billions in cash and the entire company is worth over $100 Billion. This opens the door for content producers to sue for large sums.
This new release makes Yahoo seem like that much better of an investment. Yahoo is offering everything that Google is minus the high price to earnings ratio. Sorry folks, but the Google bubble is long over. The growth rates which made Google such a high flyer are entirely unsustainable and will lead to the eventual collapse of the Google share price. If Google takes a tumble it will decrease the ability to purchase small companies which offer extreme growth rates.
Google does not have the capacity to continue these rates of growth without buying risky ventures like YouTube. When Google bought Youtube it was without income, even losing money on large bandwith expenses. Yahoo is the internet stock of choice for me, especially after Google bought this crazy lawsuit bait of a website.