Take an Offer Already, YouTube!
by Aner Ravon

As YouTube acquisition rumors surface every month or so I can’t help but wonder - is the king butt naked again or is there something in YouTube I just don’t see?

Don’t get me wrong, I like YouTube. I admit I don’t visit very often, but I get a lot of emails with links to YouTube instead of with attachments and that’s cool. Sometimes I follow the links to the main site and I love it’s layout and functionality. YouTube blends content searching, browsing and sharing in a way that saves a lot of footwork and bandwidth to the end user. However it’s main value is with personalized and personal INTERNET content sharing. Not TV. Same old (and conceptually free) Internet Content. That has value, of course, but nowhere near what some Internet TV visionaries associate with YouTube. I doubt that it’s the kind of value that can ever justify the huge (and recurring!) investment in storage and bandwidth.

People argue that YouTube supposedly pioneers “modern Internet TV penetration”. Ok… Many people wait for YouTube to “realize the new advertising model”, one that will finally take Internet TV to the next step and make personal content a money machine.

I don’t see it happening. YouTube is, at best, a dominant content sharing play. At the flip side it could gradually become a pile of trash and drift towards the “dark side” of the Internet.  YouTube’s challenge is with reaching the earlier. In any case there is no way I can see a serious TV play emerging.

For an Intranet TV play to be interesting, it needs to contain TV ingredients - qualified content that is reliably renewed on somewhat of an expected schedule. More importantly, it needs to offer at least a few hits. Right now it’s still about bloopers and cliplets. Stuff that promotes TV and not stuff that replaces it. When real channels - commercial or personal - will start broadcasting through YouTube that will be a very positive sign.

Then there is the advertising riddle. Sure, YouTube are spending millions a month on infrastructure, but wait ’till they start monetizing the content with targeted video advertising! Right? Wrong! Attaching video ads contextually like broadcast TV has been doing for ages is a long way from happening on the Internet. And video ads, like other forms of advertising, are effective when they reach a qualified, known, target audience. ESPN Motion viewers are qualified. YouTube visitors are not. With YouTube the distribution and context is so eclectic, it will take years to figure out an ecosystem and roll out the necessary tools. Google and Yahoo are so much better positioned to harvest that market when that happens and chances are YouTube, unless acquired, will only pave the way.

So my novice advice to YouTube is simple. If your only strategy is exit, take a good offer when you see one!

Aner Ravon
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