Since the Google offering, the tech IPO market has been a bust. No doubt, it needs something exciting. How about a YouTube IPO?
Interestingly enough, the co-founder of YouTube, Chad Hurley, deemed an IPO of his company as, well, "exciting." This was according to a story from MarketWatch.
But, IPO investors are a tough group. Just look at Vonage, which had a disastrous debut. Basically, investors have become anti-hot-air. Rather, what they really want is another Google; that is, a hyper-growth business with massive profits. After all, that's always something that is exciting.
And, so far, YouTube has a lot of hot air.
True, there is definitely considerable value to the YouTube brand. And, it gets over 100 million videos views a day.
But, it is running into a host of problems to monetize the traffic. Actually, its not the only social networking site with these issues. Despite being the most trafficked site on the Web, MySpace only makes $200 million in revenues. There is also the example of Skype, which is not helping eBay's sagging stock price.
As for YouTube, it needs to find creative ways to place ads on videos. This is not easy – since many of the ads are not really appropriate for brand advertisers. Also, what if these videos are illegally uploaded? This could expose YouTube to enormous litigation problems. To help deal with this, YouTube is cutting deals with content players, like NBC.
I wonder whose getting the lion share in these deals. It doesn't seem likely that content players will make the same kind of deal it made with Apple's iTunes.
Oh, and there is some competition. There are the usual suspects, like Google, Yahoo and Microsoft. There are also some other interesting players, such as Amazon.com and MTV.
Yes, a YouTube IPO would be exciting. That is, unless you are an investor.
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Reader Comments (Page 1 of 1)
9-05-2006 @ 5:00AM
Jayce said...
I would invest in YouTube if it came out. It does have a lot of risk but also a chance at a higher reward. YouTube tracks down and deletes illegal videos so the chances of litigations would be slim. I hope they do decide to make an IPO in the future.