So basically the only reason they were considering YouTube was to either deny it to their competition, or force their competition to pay more for it.
It sounds like they expected it to die on a backroom shelf somewhere if they made the purchase. This seems anti-competitive behavior even during what might otherwise be viewed as their "don't be evil" phase. They didn't see it as valuable for their own needs, they just didn't want it to grow into competition itself or via another competitor and so considered buying it to let it die.
I think you’re mis-reading the thread. Jeff Huber says YouTube are cranking features, but their backend probably won’t scale and they don’t have good monetization. That ultimately ends up being what they do — after acquiring YouTube, they re-built it using Google’s distributed systems infrastructure and software. And the monetization model today is in fact (mostly) ads.
What you then see in the thread is someone else saying: yeah we’re going to catch up, we just need a couple of more devs.
And then the counterpoint that well, even if Google doesn’t end up doing it, at least it makes it harder for Yahoo.
The original motivation isn’t just to make it harder for Yahoo. It’s that Huber wants to bring these people on board because they are really good at innovating, and Google can help make it really successful. But there was some pushback, and then other reasons were presented to continue with the conversation.
At these companies (any company?), sometimes to get what you want you have to present a diverse set of reasons, even if only one of them is the principal reason why you want to do something.
It seems fairly obvious that what the people are discussing in the linked email thread is anti competitive behavior. Here are some excerpts:
> and were thinking about a acq with Yahoo
> and it would be nice for y! not to have them
> their content quality is worse than ours ... if we pick them up it would be defensive vs yahoo
> I think we should talk to them, if nothing else to make it more expensive for Yahoo
You don't make statements like that and then explain it with "It didn't seem like they would scale and we don't have enough devs". The decision on if the buy YouTube or not (or another video company), was clearly influenced by the "risk" of Yahoo buying the very same company.
When does competition become anti-competitive? If I see a promising startup in my space with challenges ahead, it seems reasonable to consider many different angles, including whether I can help them succeed and whether a competitor could also help them succeed (or they could help a competitor).
Given that Y! was considering buying YouTube, the probability that a similar set of emails was written on Yahoo’s end is approximately 1.
IMO, that’s because they were also competing with Google. Is everyone in that market acting anti-competitively? What would that even mean (absent collusion)?
That doesn’t sound like _the_ purpose of the acquisition, it was one of the arguments in the conversation but not the sole reason.
Given that YouTube has not been killed and Google has heavily invested in it and there were some legal minefields with Youtubes content early on that Google would then take on, I think it’s reasonable to conclude that they didn’t acquire it just to mess with Yahoo
Google only generates revenue to deny their competition that money! Their sole reason to exist is to be anti-competitive! Every time they breathe they're being anti-competitive.
That would be clearcut if they had acquired YT and then promptly buried it. Instead, they invested in it massively, and built it over several years into a profitable aspect of their business. That doesn't look "anti-competitive" to me (given the usual assumptions of 21st century US capitalism).
It's not like we have to choose: Google and Yahoo can both have been anti-competitive, so what does it matter if Yahoo did, or didn't, consider things from the same angle?
They are literally talking about making a decision on the basis of eliminating a competitor from the market via a purchase they thought might have little/no other value. I think that is a reasonable working definition for examples if anti-competitive behavior.
You're assuming anti-competitive behavior doesn't exist based on the premise that it's not prosecuted more often but that is flawed logic. Anti-competitive behavior and lack of prosection are not mutually exclusive.
We don't see antitrust lawsuits for a variety of reasons. One of which is that they are extremely resource intensive to fight since by definition they tend to be fought against massive corporations. When the feds can go after 50 other cases for the cost of going after a single massive company, that's a hard sell.
As to purchasing a competitor: Sure, if you're purchasing it because it adds to your capabilities then it seems fairly straightforward. That's not what we see here. Here, we have an example of purchasing them when, at this stage, Google saw little or no value in it except as a means to limit competition.
>As to purchasing a competitor: Sure, if you're purchasing it because it adds to your capabilities then it seems fairly straightforward. That's not what we see here. Here, we have an example of purchasing them when, at this stage, Google saw little or no value in it except as a means to limit competition.
You're interpreting the email screenshots incorrectly. I think you need to carefully re-read them and mentally note that there are _2_ different people expressing 2 different opinions: Jeff Huber & [redacted].
- Jeff Huber (Google Ads team): he initially brings up the question about a Youtube acquisition and sees them as additive to Google because he sees their team iterating on new features faster. He perceives the Youtube team as a "passionate" bunch. He also sees value in getting Youtube's assets and existing deals if Google buys them. Jeff sees synergy with buying them because he predicts that Youtube will eventually need a more scalable backend (think of Google's big datacenters) -- and monetization... and as a convenient coincidence... Jeff is in the ads team.
- [redacted] (Google Video team): he pushes back because he thinks his Google Video team will eventually build the same Youtube features anyway by 4th quarter. He's the one who wrote Google acquisition of Youtube purchase would be "defensive".
You're giving too much weight to one person's opinion ([redacted]). However, PC is not the ultimate decision maker for Google to buy Youtube.
Maybe we can use some common sense about [redacted]'s perspective. If [redacted] were to wholeheartedly agree with Jeff Huber, that would mean.... he's admitting that he & his team are not competing as well as those Youtube guys. So it would be understandable human nature for him to think the Youtube acquisition would accomplish nothing but take them away from Yahoo.
It looks like Jeff Huber (and later Susan Wojcicki) championed buying Youtube because of the value there. It seems that [redacted]'s opinion was discounted or ignored. You don't have war meetings about the risks of fighting the multi-million dollar lawsuit with Viacom as a consequence of buying Youtube, and then subsidizing Youtube's money-losing business for years if you saw no value in them.
Well said. And as [redacted] himself noted in one of those emails, "there are 20 more sites like this that Yahoo could go out and buy". In order for Google to effectively gobble up the competition, they would need to go on a video site acquisition spree far beyond YouTube -- and they didn't. From their behavior, it really does look like Google was buying YouTube because they thought the two companies would complement each other.
I’m saying we only know when behavior is anticompetitive, in the sense that someone undoubtedly acted in a way that violates US antitrust laws, when it’s ruled as such in court. You can have an opinion for if some act is anticompetitive behavior, but you can’t allude to that as fact or create a ”reasonable working definition” when such criteria is already writ in law.
If this was Google in 2016, it would be very notable and your comments would apply.
This is all completely irrelevant as anti-competitive behavior is only an issue when a company holds a monopoly, which Google did not have in any way in 2005. In the absence of a monopoly position, anti-competitive behavior is completely normal, expected, standard, and does not even merit the label because it is how businesses grow.
Anti-competitive behavior is the normal way businesses operate. It only becomes notable or illegal when they have a monopoly position, which I don’t believe describes Google in 2005.
[Edit: I see the feature quote now] I don't see it.
They're saying it's nothing special-- they're not aware of a significant talent pool and there are "no big video brains".
From there, the first two reasons stated for actual consideration in acquiring YouTube are as a defense or because even talking to them will make it more expensive for someone else to acquire them.
I did miss it, thanks. I avoid Twitter, so browsing it on a phone makes it easy (for me) to miss how they stacked the images.
But that doesn't change much about this story: what does it matter that they note features-- already on Google's roadmap-- when they then, as their stated reason for actually buying YouTube, is as a defensive move?
Basically:
"YouTube has some nice features but we're already building them and just want the company so Yahoo can't have them."
That doesn't make this picture look any better for Google.
> Basically: "YouTube has some nice features but we're already building them and just want the company so Yahoo can't have them."
That's not what it says. If you want to go that basic:
"Youtube is doing better at innovating here than us, but we have some stuff they don't, and if we acquired them we'd get the best of both worlds and deny it to Yahoo"
> That doesn't make this picture look any better for Google.
Even if you make the case this only anti-competitive there is nothing wrong with that behaviour by 2005 Google. It's not illegal or even significant in anyway.
Wow, thank god we had the geniuses at Google to give them their unique monetization model: ads!
I don't get it, that first paragraph describes just about every startup ever. And I'm sure had Yahoo acquired it, it would have been "re-built using Yahoo's distributed systems infrastructure and software". Don't you know it, they would have updated the letterhead too!
> Wow, thank god we had the geniuses at Google to give them their unique monetization model: ads!
I think you're forgetting the state of the web in 2005.
The tech to do on the fly pre-roll and mid-roll ads in an existing video didn't exist in 2005, there was no significant market for video advertising on the web in 2005, and web browsers could not play video at all. It was all plugin based. There was no streaming standard. There was no way to circumvent banner ad blocking, too. Sure, that new thing Web 2.0 might help, and XHTML 2 sounds promising, but it's not there yet. To top it off, the main way most users -- even Americans -- connected to the internet in 2005 was still dial-up! So you're a niche market, too.
If your model is "just use ads" then the 2005 response is "okay, but how do you sell dynamic ad views in videos with maybe a couple thousand views? And how do they work?"
YouTube was going to go bankrupt without a large reservoir of funds.
YouTube would have suffered a far worse fate in the hands of the extra special incompetent Yahoo organization.
While I might like to see YouTube spun out of Google, Google is the primary reason it survived. Along with bleeding to death financially as one likely outcome, YouTube was going to get sued into oblivion. Google shielded them in terms of liability because Google was fearsome enough to intimidate the overly lawsuit-happy savages in Hollywood and the music industry. That delayed the reckoning that was coming for YouTube in regards to the content on their platform that was under copyright by major media publishers (music in particular). There were dozens of prominent articles written about that specific context back in those years.
>It sounds like they expected it to die on a backroom shelf somewhere if they made the purchase. This seems anti-competitive behavior [...] They didn't see it as valuable for their own needs,
I think you're reading too much conspiracy motive into Larry's terse email.
Based on various interviews, Susan Wojcicki was head of Google Video at the time and she acknowledged they were losing against the upstart Youtube. She originally thought Google Video would succeed because Google was "playing nice" by negotiating legal licenses with broadcasters like NBC whereas Youtube was just a bunch of pirated content.
It was a big risk to acquire Youtube because the Viacom piracy lawsuit was looming. Google decided they could handle it and went ahead with the acquisition. They saw the value in Youtube and didn't have any intention of killing it.
Based on these emails, the very first consideration that sparked their interest-- no matter what came later-- was to deny it to their competition or drive up the price.
Just because upon investigation, YouTube actually seemed to have some value does not negate the fact that their first motive was based upon limiting competition.
One of them wrote something like that, and seemed against the idea on that basis because there were other options Yahoo could go for. That was basically an argument for not doing the deal because it would only, maybe have those effects, but that wasn’t the opinion of the others. Ultimately that’s not why they bought them anyway. So no, not really.
Ultimately that’s not why they bought them anyway. So no, not really
That's not relevant to the fact that limiting competition was their very first consideration.
And other competitors were seen as lesser value because of their location, not to mention the fact that the reply to that argument was that just talking to them would still hurt competition by making any acquisition more expensive.
Just because Google ultimately found YouTube to be valuable doesn't change the fact that their first motive was to limit competition.
It sounds like they expected it to die on a backroom shelf somewhere if they made the purchase. This seems anti-competitive behavior even during what might otherwise be viewed as their "don't be evil" phase. They didn't see it as valuable for their own needs, they just didn't want it to grow into competition itself or via another competitor and so considered buying it to let it die.