Following YouTube Buy, What's Next for Google?

By now the tech industry -- not to mention Wall Street -- has had time to absorb Google's (Nasdaq: GOOG) US$1.65 billion acquisition of online video sharing giant YouTube, a deal financed with the company's robust stock value. The deal is official, despite some doom and gloom reminders of similar over-sized deals from the last tech boom -- deals that are of course long dead. Now the question is: What's next for Google, at least as far as this particular piece of Web 2.0 is concerned?

Prognosticating on Google's overall direction or specific strategy about a piece of technology has become the tech industry's favorite parlor game, with the company providing as little guidance as possible outside of its Securities and Exchange Commission filing statements. Nevertheless, it is clear that Google is going to leverage videos not only to continue to build out its formidable index of content, but also to extend its advertising platform beyond the Internet.

Prevalent and Accessible

First, however, Google will have to digest its YouTube acquisition, one of its largest thus far. Bill Holsinger-Robinson, COO of Spout.com, an online community for film devotees, told TechNewsWorld the deal does make synergistic sense.

"YouTube serves up millions of online videos, [while] Google of course is expert in indexing," Holsinger-Robinson said. Consumers, he predicted, can expect to receive new video-related content and services as a result -- not just from whatever Google will generate from YouTube, but from other companies as well. "Video will be that much more prevalent and that much more accessible," he said.

Long-Term Plans

Indeed, that is the very point of the acquisition, Matt Booth, an analyst with the Kelsey Group, told TechNewsWorld. "There is no doubt video is going to drive a ton of revenue on the Internet," he said. Immediate and mid-term questions that advertisers, content providers and Web sites will have figure to include what kind of content will best deliver ROI to advertisers. Conversely, Booth said, the industry is going to have to find a way to vet content for advertisers.

Otherwise, "I can see an everyday consumer goods product finding itself positioned next to a video of questionable content," Booth noted.

Once such operational issues are settled, though, Google will be using its video arsenal to build out an advertising platform that can extend across all mediums, from iTunes to broadcast television.

"The technology and processes to insert an ad in front of a video and track returns for advertisers is the same, whether that video is on a computer screen or a TV," Booth explained. "Once Google has a platform developed, that is where it will be headed."