Google rumoured to be considering YouTube acquisition

9 October 2006 15:41 GMT / By Amber Maitland

Google is rumoured to be in talks to buy video sharing phenomenon YouTube for a reported $1.6 billion.

The blogosphere has been speculating for months about how to price YouTube, which so far has failed to monetise the traffic to the site, which is estimated at 32 million visitors each month.

It’s believed that if Google buys YouTube, it could inject its own advertising next to videos as they play, thus garnering revenue from a site that is estimated to cost £800,000 each month to host all the video clips uploaded to it.

The Wall Street Journal reported on the rumour last Friday, and now The Guardian newspaper has chimed in with the news that a bid could take place this week.

Why buy a site that could potentially be an albatross around Google’s neck? Potentially to keep it away from rivals like Yahoo and Microsoft.

If the bid does go through, it makes sense that Google would merge its lacklustre Video site with YouTube.

Full tags

Biz, Mergers, Google, YouTube, Rumours, Apple, Zune