Who said dotcom’s have gone busted? Google whammed pass $500 yesterday, and hit as high as $510. And here I'm thinking, damn, if only I had the guts to get in early in September when it was still $300.
I think I better get in now, because honestly, I see this baby jumping to $600 bucks in a matter of months. What made this stock jump pass its record high was a result of their brilliant move - buying out YouTube.com. Simply a magnificent, an ingenious, an awesome move! By buying out YouTube, Google has positioned itself to not only to be the lead search engine provider, but also the top online video hotspot globally. YouTube had over 5.5 billion views just this past September, whereas Google Video lacked behind with only 739 million. Views in the US alone were 1.3 billion for YouTube, and only a mediocre 241 million for Google Video. Interesting stuff you know.
But let's look at YouTube a bit more, because that's where the cool stuff is.
But before I do, listen to what Steve Ballmer, CEO of Microsoft said about the move "if you believe it's the future of TV, it's clearly worth $1.6 billion". Microsoft is heavily investing in iTV now, or other internet-based television. I bet you they're beating themselves up now.
So as I was saying, YouTube was indeed a hidden jewel! According to comScore, as at September, YouTube would have transferred 38 million unique users over to Google. And just a year ago, they had barely 4,000 unique users. Their one year growth was 11,000%. Okay, let's calm down here, it's impossible to keep growing at this rate, but definitely, it will keep growing, at least I expect traffic to increase at least two to three times under the proper management and resources at Google. It will continue to drive users in the video demand market to Google.
Now revenues on the internet space are a bit different from other stuff. Normally revenues are earned on a per minute basis. Meaning as users visit a site, each minute they spend on the site would generate revenue. Let's call this RPM (revenue per minute). And this is where the amazing news comes from. Also according to comScore, back in August 2005, a user would spend an average of 7.13 minutes on YouTube, Google Video users also spent about 7.25 minutes.
One year later though, YouTube kicked Google's butt, and users spend an average of 69.33 minutes! (Google Video users only spend 15.98 minutes). I guess Google just couldn't beat them, so they decided to buy them.
RPM at YouTube is at about $0.001. With Google's help, I wouldn't be surprised if RPM can be as high as $0.0015 to $0.002. And if you work out the numbers, if page views continue to be 5.5 billion a month, 12 months, at 69.33 minutes each time, that's an extra US$132 million a year for Google - and that's only being conservative.
Of course, the legal aspect on copy-rights is a big issue. But Google has been taking the appropriate steps to resolve these, including filtering video uploads, and dealing directly with the effected companies, like Sony BMG, Warner Music, etc.
I wouldn't worry too much. Google is still my favorite.