Google Stinkum

OK, this blog will be about more than just the core topic (inspiration for entrepreneurs going it alone) and Google video and Mark Cuban’s commentary, but this is just too fetid not to comment about. There’s also a large and somewhat sad point to all of this, but you’ll have to read to the end to get that.
Take a look at Mark’s inside look at the GooTube deal. I’m not saying it’s accurate… who knows… but it sure would explain a lot of things:

  • The crazy high valuation. The YouTube guys can tell their grandmothers that they sold for $1.65 billion but the reality is they sold for about two-thirds of that with one-third set apart for paying off big media. And of the money they got, most of that is in stock that — my view — will be worth a lot less because of this deal.
  • The suits against the smaller video hosting companies.
  • The big media companies silence about this deal. (They can’t talk if they were part of the deal and the contract says they can’t talk.)
  • The weird (for Google) announcement that it is doing a video hosting project that is pretty actively anti-long tail. I think the techcrunch guys got it right that Google has been the model of how to make money with the long tail, and this deal is the exact opposite of it. But if they have some deal in place with all the big media producers, then this makes a lot more sense.

I wrote a book review about The Long Tail, and my day job is running a site that brings the long tail to legislation. I think the long tail concept is brilliant. I also used to be a reporter, so I know that if that post about the junk that went on behind the scenes is true, that will be the big story as no reporter can resist a scoop that will eventually become lawsuits, etc. We’ll be watching this unfold for a long time.

But to me the biggest story is Google turning it’s back on the Long Tail. They aren’t “dancing with the one’s that brung ’em.” Luckily the thing that Google has started is now in motion, so if — IF — Google really does turn it’s back on the Long Tail there will be myriad others who will pick up the notion and move forward with it.

OK, back to work for me. You, too!

About

In my second go around as a Credit Card-Self-Venture-Capitalist.

One comment on “Google Stinkum
  1. Lal says:

    Scott,

    I read the same article by Mark and blogged a summary at http://lallylogic.blogspot.com/2006/12/some-of-what-really-went-on-behind.html
    Was interesting 2 c his take on the whole deal. Have seen some other VC bloggers comment as well and seems 2b similiar viewpoint. Time will tell if they got a good ‘deal’.
    For the small guys like us its kinda like ‘star gazing’ !

    Ps the addition ? threw me 4 a moment!

    Lal