Yet there is also a more sinister reason why Google is buying YouTube. It is to do with the fact that the two have a common set of business values in the sense that neither seems to care a fig about the law of copyright. Both rely on the use of free content to drive their business. They therefore have next to no cost, or at least one so marginal that it wouldn't be recognised by any traditional media company.
Google is the most talked-about business phenomenon of recent times. Its founders, Sergey Brin and Larry Page, are feted wherever they go like demi-gods for the wealth they have created and the revolution in business and lifestyles they have helped bring about. No doubt a great deal of this is justified, but I'm still not wholly convinced Google is a proper business. As a sustainable business model, it may even in time prove to be as transitory as the online gaming sites, many of which have been trounced by confirmation of what investors and users chose to ignore - that online gaming is illegal in the US.
Google and YouTube are based on a not dissimilar misapprehension. OK, so both are only too happy to remove content where breach of copyright can be demonstrated, but they are extraordinarily aggressive in the manner in which they attack the soft underbelly of intellectual property rights, and their basic philosophy is that all content should be free.
Insulated from the real world by their newly found billions, it must be nice for Messrs Brin and Page to think this is true. In fact, all content, like any other form of produce, must ultimately be paid for, and if all Google is doing is acting as a supermarket for, or an aggregator of, other people's stolen goods, then in the long run it might have something of a problem.
Google and YouTube are routinely in massive breach of copyright. The fact that this seems to be tolerated is almost as odd as the phenomenon itself of one of the world's most admired companies being based on such a legally dubious business model. Yet the legal challenge to Google has so far been half-hearted.
At YouTube, some of the music majors have adopted the view that if you cannot beat them you must join them, and signed up to revenue-sharing deals on anything that might be generated by their material. Even so, breach of copyright remains the core issue for any business that relies on file sharing. Google and YouTube do just that. Napster and some of the other file-sharing sites that devastated the music industry have been defeated. Google and YouTube have yet to be similarly challenged.
It makes perfect sense for Google to buy YouTube. Based on similar philosophies, the two fit together like hand in glove. But the valuations are powerfully reminiscent of the mistakes that were made in the original dot.com boom seven or eight years back. The thinking relies on the idea that the wheel has in some way been reinvented - and that the traditional laws of business have been suspended. You'll forgive my scepticism.
Jeremy Warner talks a lot of sense in today's Independent.
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