Grouper makes YouTube a $2 billion buy
Sony's $65 million purchase of video-sharing site Grouper tops the blogs this morning. Most are caught up in the arcane nuances of Web traffic measurement. Why? Now that the Grouper deal has given online video a market valuation -- in dollars per viewer, mostly -- Grouper's larger rivals like YouTube have, at least in theory, price tags on their heads.

TechCrunch crunches the numbers, noting that ComScore says Grouper had 542,000 unique visitors in July, which would imply a value per viewer of $70. The implication? All caveats aside, Marshall Kirkpatrick writes, "... the $65 million valuation on Grouper suggests a YouTube valuation of around $2 billion." Astounding: YouTube's co-founders Chad Hurley and Steve Chen have seen their imputed valuation jump from $1 billion to $2 billion in less than a month.

Rafat Ali at PaidContent.org casts a more jaundiced eye on the news, however, pointing out that "the valuation is not really based on traffic." According to Ali, Sony is paying for "a solid management and technical team," as well as an online video-editing tool called "Groovie." Groovy.

And, lest you thought this market wasn't entertaining enough, Ali thinks there's more action to come: "This probably signifies the start of a shakeup in the video-sharing space," he writes. No doubt.

Is YouTube worth $2 billion? Tell us what you think by leaving a comment below.
Posted by Oliver Ryan 9:49 AM 3 Comments comment | Add a Comment

Price tag should be realistic. And there will be always something which hasn't come yet in the market.
Posted By Amit Solanki, Oklahoma : 3:31 PM  

Back to the same nonsense. None of these plays are worth it. It's an over-reaction in the market. Thing about it. What is You Tube offering? An infrastrcture to play endless content (not all great) for the reality tv generation that can't think more than 1-2 minute clip. That's what we have.

And to capture attention in the media and free exposure, these guys go about and buy something that is simply infrastructure (and possible some good s/w), user-generated content which was virally-driven in the first place thanks to FREE and what do you have?

Do you have a revenue model? One columnist said Apple should buy YouTUBE. Why? Apple Itunes already has FREE podcasts and now is collecting VODcasts. Outside of YouTube's coverage and critical mass, Apple already has the closed loop system for content delivery for video iPod.

There is nothing earth shattering here - it's the investment market acting up again with irrational exuberance over a simple model that has generated zero revenues. Wasn't YouTube trying to figure out a business model? Oh yeah RIGHT. Their model was to be BOUGHT OUT. Yes, an excellent model -- $2b valuation? What a complete joke.
Posted By Alex B, Toronto, Canada : 10:32 PM  

YouTube is not worth $2 billion. This is not the year 2000 again is it? That would be a completely inflated price. They still have not made a profit. There is potential but it's competitors are catching up.
Posted By Beau, Las Vegas, NV : 6:57 PM  

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.