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Google Acquires YouTube

Category: Science & Technology Key figures: Chad Hurley (YouTube CEO), Steve Chen (YouTube CTO), Jawed Karim (YouTube co-founder), Eric Schmidt (Google CEO), Sergey Brin and Larry Page (Google co-founders)

Summary

On October 9, 2006, Google Inc. announced it had agreed to acquire YouTube, the leading online video-sharing platform, for approximately $1.65 billion in an all-stock transaction. YouTube had been founded just nineteen months earlier, in February 2005, by Chad Hurley, Steve Chen, and Jawed Karim, all former PayPal employees. The deal closed on November 13, 2006, after satisfying customary regulatory closing conditions. Under the terms of the agreement, YouTube continued to operate as an independent subsidiary, retaining its brand, its San Bruno, California headquarters, and all 67 employees, including co-founders Hurley and Chen. Eric Schmidt, Google’s CEO, stated upon closing that the combination would allow both companies to offer improved content quality, user experience, and business opportunities for partners.

Significance

The acquisition, at $1.65 billion, was the largest technology acquisition to that date and became a defining moment of the Web 2.0 era, demonstrating that user-generated content platforms could command valuations comparable to established media companies. By allowing YouTube to operate independently rather than absorbing it into Google Video, Google preserved the community and brand that had made YouTube dominant, a strategy that proved prescient as YouTube grew into one of the world’s largest media platforms. The deal signaled to the technology industry and investors that the second wave of the consumer internet — built on participatory, user-driven content rather than static web publishing — had arrived at scale.

Sources

• YouTube — Wikipedia
• Google buys YouTube for $1.65 billion — NBC News
• Google Inc. Form 8-K (acquisition announcement), October 9, 2006 — SEC EDGAR

• [YouTube

  History, Founders, Purchase, & Facts — Britannica](https://www.britannica.com/topic/YouTube)

Related

• Twitter Launched — the other defining Web 2.0 platform debut of 2006, launched three months before the YouTube acquisition.
• Time Names “You” Person of the Year — YouTube’s explosive growth was a central reason for Time’s recognition of user-generated content in December 2006.
• See the full Timeline of 2006 and master Index for concurrent events.