Tag Archives: google

When will we see the first $1.5 billion valuation of a YouTube network?

stylehaul

Want to know how smart a bet Google made when it purchased YouTube for $1.5 billion in 2006? Independent companies that were built almost entirely on YouTube’s platform are being sold for nearly that same amount.

In March, Disney acquired Make Studios, a network of over 50,000 YouTube channels with close to 400 million subscribers, in a deal that could value the company up to $950 million. Then in September, an investment group took a stake in Fullscreen, a network with 3 billion monthly video views, that valued the company between $200 million and $300 million. And finally StyleHaul, a network that specializes in beauty and fashion shows, was acquired for a $150 million valuation. As Digiday’s Eric Blattberg  put it, “It’s a good time to run a big YouTube network.”

Here’s another way to put these valuations in context. Fullscreen, a company launched in 2011 and distributed on a platform less than a decade old, is valued higher than what the Washington Post went for when it was sold to Jeff Bezos.

How did we go from prognosticators worrying that YouTube would always be a loss for Google to massive valuations and revenue for both YouTube and companies that use it for distribution? Well, you could probably point to December, 2010, when the company launched pre-roll advertisements. Before that, it was only running Adwords-like text ads. With that move, brands that were already spending millions to develop television commercials could simply re-purpose those same commercials on YouTube at mass scale.

Vevo and its backers also deserve a lot of credit for their prescient early YouTube strategy. For decades, music labels had been giving away their music videos to MTV and VH1 for free (for marketing purposes) and the executives at Universal and Sony were determined to do a better job at monetizing the web. So they created an online networks that distributed their signed artists’ music videos mainly on YouTube. That’s why if you watch a music video on YouTube today, it likely has a Vevo logo on it.

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The move paid off. As of 2012, Vevo was bringing in an estimated $280 million in annual revenue and receiving 3.1 billion views a month. It began looking for more backers at a valuation between $700 and $800 million. And in 2013, Google took an official stake (likely over worries that Vevo would otherwise move its network over to Facebook), that valued the company at $700 million. No doubt having so many music stars actively marketing themselves on YouTube paved the way for mainstream legitimacy, allowing other major media companies to invest in the platform.

With YouTube itself projected to generate $7.5 billion by 2015 and as much as $30 billion in just a few years, Google’s $1.5 billion bet on YouTube in 2006 may go down in history as one of the company’s smartest. I couldn’t help but compare it to the $30 billion Comcast paid for NBC Universal. How long until a YouTube network sells for that much?

Are you beginning to understand why news companies are suddenly investing so much in video?

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FULL DISCLOSURE: Want to know how I was paid to write this article? I explain it in this video.

An awesome interactive voting information website

With election day upon us, millions of Americans are flocking to the polls to vote for candidates at both the state and congressional levels. But before they can cast their vote, they’re likely confronted by a single question: “Where the heck do I vote?”

The biggest names in tech, including Google, Facebook, and Twitter, have launched Get to the Polls. The site was designed and developed, with help from my colleagues at Beutler Ink,  based on the Google Civic Information API.

The site allows users to enter their registered address and get:
  • Their polling location
  • Directions to the location
  • Hours of operation for the location
  • A sample ballot
  • Share functionality to help people spread the word

Want us to create something awesome like this for your organization or company? Go here to learn more about our services.

get to the polls

Infographic shows spikes in Google searches for “voter registration” and “early voting”

Though cable news outlets and DC newspapers like Politico cover politics 365 days a year, the vast majority of Americans only really become intensely interested in an election in its last leg. Only then do they seek out a closer look at who’s running for office and, more important, where they stand. Unsurprisingly, many of them turn to Google to ferret out this information.

For the past few months, my colleagues at Beutler Ink have worked closely with the team at Google Politics & Elections to comb through Google’s extensive search data and surface interesting trends that give key insight into the voting public. For instance, the infographic below shows a sharp spike in interest in recent weeks for both “voter registration” and “early voting.”

Want us to create something awesome like this for your organization or company? Go here to learn more about our services.

keywords

Why selling smart home technology is nothing like selling smartphones or computers

Fast Company’s Austin Carr profiles Tony Fadell, the CEO of the smart home technology company that Google acquired for $3.2 billion. Much has been written about the “internet of things,” in which many of the disparate hardware devices in our lives — TVs, lamps, thermostats, refrigerators — begin to talk to both each other and our smart phones. But I was struck by one interesting observation in the piece: Unlike smart phones and computers, which we buy with either the conscious or unconscious knowledge that we’ll be replacing them in two to three years, we don’t replace our appliances with nearly the same frequency:

The company studied thermostat interfaces going back to the 1950s, realizing that even the advances of touch screens in the late 1990s and early 2000s did little to improve the ancient but resilient physical-dial user interface. Whereas incumbents incorporated endless digital features, such as calendars and photos, Fadell and Rogers understood that additional icons confused consumers. Household devices are not upgraded every two years like a phone; more likely, they’re replaced every 10 or 20 years. The design had to be timeless. “We thought about all kinds of crazy animations, background images, even adding a weather [app],” Rogers recalls. “But it’s a thermostat: It’s not supposed to cook you breakfast.”

Should every political campaign hire an SEO consultant?

With high-profile presidential and senatorial campaigns, voters are bombarded with so much information that it would be difficult for any one information source to tip the scales significantly, but as you go increasingly down ballot it becomes more and more likely that a voter will have to specifically seek out information on a candidate before voting. In those cases, it’s probable that that voter will simply turn to Google, which gives the search engine tremendous power in shaping that voter’s view on a particular candidate or issue. How much power? Well, according to one researcher who measured voter sentiment after showing several groups different search engine results, it’s easy to imagine a scenario where it could change an election outcome:

With a group of more than 1,800 study participants – all undecided voters in India — the research team was able to shift votes by an average of 12.5 percent to favored candidates by deliberating altering their rankings in search results, [Psychologist Robert Epstein] said. There were also increases in the likelihood of voting and in measurements of trust for the preferred candidates, and there were decreases in the willingness to support rivals. Fewer than 1 of every 100 participants, meanwhile, detected the manipulation in the results …

… Each of the subjects was randomly assigned to a group favoring one of the candidates. The top 10 links Kadoodle produced all featured Web pages favoring that candidate; favorable links to the other two candidates, meanwhile, fell to the bottom of the search results. After viewing the search results, typically for 10 or 11 minutes, the subjects were queried on their voting preferences.

Among the group shown pro-Gandhi rankings, his support increased by 26.5 percent. For Kejriwal, the increase was 11.3 percent, for Modi 9.1 percent. (Each experimental group was the same size, in part to minimize any potential effect on the election itself).

The article notes that search engines have an incentive not to skewer results, but the campaigns themselves are under no such obligation. Through the purchase of Adwords and the use of crafty SEO strategies, you can easily imagine scenarios in which a candidate pushes positive information on himself or negative stories on his opponent. In fact, you don’t need to imagine that scenario, because campaigns are already spending millions of dollars on search engine advertising every election cycle.

Silicon Valley’s executive cartel

Why did the CEOs of several major tech companies get away with agreeing to a no-poaching pact — and thereby suppressing the potential wages of their employees – for so long? New York’s Kevin Roose is convinced that the very tech workers who would have otherwise complained sooner were lulled into inaction by their own privilege and high pay, unable to rally the kind of outrage that would have been sparked if such anti-worker tactics had been enlisted in industries with more working class earners:

What makes tech different from other industries is that its workers are often so privileged that they don’t notice they’re getting the shaft. Even when they do, many engineers feel guilty advocating for more money, which is why events like this “Startup Equity Rally” in March almost always fall flat. (Keep in mind, also, that this guilt is partly deliberately cultivated by the executive class – the original impetus for giving tech employees over-the-top perks, after all, was to keep them from unionizing.) But high tech salaries and plentiful perks don’t make the executives’ advantage-taking any more ethical.

Kara Swisher: “Every day, the blogosphere is getting better and print media is getting worse”

A lot of people are making hay over Recode founder Kara Swisher’s remarks that Google is a “thuggish company” (the quote made notable by the fact that her wife is a Googler), but I found her defense of tech bloggers who operate outside the mainstream media to be equally fascinating:

Do you really think these media giants are threatened by you? 
People are worried about what’s goingto happen to journalism—and they should be. Every day, the blogosphere is getting better and print media is getting worse; you have to be an idiot not to see that. The fact that we’re still arguing it is comical. It’s like arguing gay marriage: I’ve had it. It’s done, you’re wrong. Wrong, wrong, wrong.

What do you make of the argument that online tech journalism is too close to its subject?
As soon as you tell me what the ethical problem is, I will be happy to answer. But the “problem” seems to be that the journalist has some say in the business. That doesn’t mean that they’re selling ads or writing nice stories to be nicer to advertisers. That’s bullshit—nobody does that.

But some people do.
Of course. But the good people don’t. Why do we have to get pilloried for other people’s behavior? I’m not responsible for the people who cut corners. I wish that they didn’t, but it’s not what we do. The new meme is that tech journalists are too in bed with their sources. It’s the nature of journalism to need to be close to your subjects. And either you’re able to be tough on them, which a lot of us are, or you get in bed with them, and some people do. I just don’t think it’s new.