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Sunday, April 19, 2009

How Much Did Google Pay For YouTube Video and When?

In November 2006, Google (GOOG Charts) bought privately held YouTube for $1.65 billion in stock. (Details below the charts of Google stock).

Word is out that Google will retire "AdSense video units" at the end of April because
"we've found that it hasn't been performing as well as we had hoped, so we've decided to focus our efforts on other opportunities to help publishers monetize their sites"
That is code for "we have yet to figure out how to make money with our $1.65B investment in YouTube. We should have bought US Treasury notes with the money."

For commentary and my current outlook for GOOG, read "Kirk's Investment Newsletter"

From Google Closes Acquisition of YouTube

MOUNTAIN VIEW, Calif., November 13, 2006 – Google Inc. (NASDAQ: GOOG) announced today that it has closed its acquisition of YouTube, the consumer media company for people to watch and share original videos. In connection with the acquisition Google issued an aggregate of 3,217,560 shares, and restricted stock units, options and a warrant exercisable for or convertible into an aggregate of 442,210 shares, of Google's Class A common stock. The number of shares of Class A common stock issued and issuable by Google was calculated by dividing $1.65 billion less certain amounts (approximately $15 million) funded to YouTube by Google between signing and closing by the average closing price for the 30 trading days ending on November 9, 2006. 12.5% of the equity issued and issuable in the transaction will be subject to escrow for one year to secure certain indemnification obligations.
Disclaimer: I bought Google stock for the first time at $310 per share for my own personal account and "Kirk Lindstrom's Newsletter Explore Portfolio." See this pdf for an example of a recent newsletter buy alert for GE. I may sell or take profits in these shares at any time and will probably only announce it to my newsletter subscribers.

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