By Tim Ferguson, 9 October 2006 15:15
NEWS
YouTube would make a good acquisition target for Google according to analysts, as rumours of a $1.6bn bid by the search giant for the video-sharing site continue to circulate.
Google is in discussions to acquire YouTube for $1.6bn, according to a New York Times story. But the talks are at an early stage, and other companies have also expressed interest, according to the report.
And while Google told silicon.com it wouldn't comment on "rumour and speculation", analysts see a good fit between the two companies.
Butler Group senior research analyst Richard Edwards said the thinking behind any Google bid would be to avoid continuing developing its own, less successful video content site. "If you can't beat them, join them," he said.
Edwards added the deal "would fit nicely as an extension of Google's core business".
YouTube's audience growth during 2006 has hit 606 per cent, according to figures from Nielsen/NetRatings. By contrast, Google Video has only seen a 54 per cent increase over the same period.
James Governor analyst at RedMonk said: "If Google doesn't buy YouTube and someone else does, it will create problems for them.
"YouTube has built itself a franchise."
YouTube could not be reached for comment at the time of publication.
Not all industry watchers are convinced though. Last week analysts from Forrester Research warned copyright issues could undermine YouTube's business model.
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