Google Acquires YouTube at $82 per Unique User

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Staggering price paid by Google, way over average current portal valuations. Youtube has 20 million unique users a month, so the acquisition price is $82 per unique users, which is high compared to most portals. Yahoo, a high value brand company, only achieves an $86 per unique user valuation.

At the $1650m the YouTube acquisition on its own will not provide Google with a Return On Investment. Though they declare they will keep the Youtube brand separate, extensive “synergies” will have to be found and exploited for the acquisition to create value for Google.

Brin, Schmidt and Page must have a specific monetisation strategy in mind to extract some positive ROI from this acquisition. Straight forward adsense has difficulty achieving high CPMs from the current YouTube design given the lack of effective context for Adsense to detect the right keyword phrases or traffic segmentation.

In spite of extolling the virtuous of internal innovation, Google has succumbed to buying a successful service. As ever, acquiring a successful business comes with a price tag; it is now up to Google to improve Youtube and generate value. This is not the first time Google has found ways to monetize a superior service though; Google Search had no superior business model, originally.

[Via Google Press Center: Press Release]

[Via John Battelle]