On the Soapbox

It all started out as a rumor. Which the Wall Street Journal then picked up. Eventually, everyone was talking about it. I, however, did not believe in this rumor because it made absolutely no sense:

1. Google is buying a pile of liability. YouTube is flooded with illegal material that infringe copyright. YouTube has not been sued yet because they are a small independent operation with no money. If Google owns YouTube, then there is suddenly a lot of money that could be won through infringement suits. This alone makes Google's buyout of YouTube incredibly stupid.
2. Google will eventually be forced to clamp down on copyright infringement on YouTube, thus sanitizing it to something similar to Google Video. Illegal videos are extremely common and popular (popular enough to draw even Bill Gates into piracy crime). Any clampdown will effectively destroy the attractiveness of YouTube and decimate its user base.
3. Google already has a decent video service of its own. Once the YouTube user base is destroyed, Google would just have a shell of a company that is no better than its own video service.
4. There is no way that an unprofitable YouTube could be worth over $1.6 billion USD.

As it turns out, Google really did bite. Well, my criticisms still stand, and I am dismayed at this decision. This also reinforces my belief that Google really does not have much in the way of a grand scheme. If Google really did have a plan, there would not be the recent decree to their employees telling them to stop launching products and to instead focus doing things like integrating existing ones into some sort of coherent strategy. Google is a company built on accidental success (Google's CEO: "We throw it against the wall and see what sticks.") and driven by only a vague silhouette of a strategy, and this YouTube deal (which is so reminiscent of the sort of reckless drunk-on-success deals of the dot-com bubble) certainly fits that characterization.