YouTube co-founders Chad Hurley and Steve Chen speak in an online video posted on their website.
On this clip on the YouTube website, President Bush is seen giving German Chancellor Angela Merkel an impromptu back rub.
YouTube co-founders post online video after deal
CTV.ca News Staff
The grinning co-founders of YouTube posted their own online video this week, after Google announced it would buy their company for US$1.65 billion.
In a message typical of YouTube's many low-quality video blogs, Chad Hurley and Steve Chen briefly discuss the deal before breaking down in laughter.
"The most compelling part of this is being able to really concentrate on features and functionality for the community," Chen says in a serious tone.
Hurley then adds: "This is great: two kings have gotten together, and we're going to be able to provide you with an even better service and build even more innovative features for you."
At the mention of "kings," Chen breaks away from his business partner and starts giggling. Hurly tries to bring him back but Chen laughs and says, "Get your hand off of me!"
The sale marks the highest price yet paid for a consumer-generated media site.
The all-stock deal also makes YouTube by far the most expensive purchase made by Google during its eight-year history.
The deal combines two of the most popular Internet brands: Google, the leading global web search engine and YouTube, a Silicon Valley upstart synonymous with the video-sharing craze.
Google is betting YouTube will provide it an increasingly lucrative marketing hub as more viewers and advertisers migrate from television to the Internet.
"This is the next step in the evolution of the Internet," Google Chief Executive Officer Eric Schmidt told reporters Monday.
Selling to Google will give YouTube more technological muscle and advertising know-how, as well as generate a staggering windfall for a company that was running on credit card debt just 20 months ago.
YouTube will continue to retain its brand, its new headquarters in San Bruno, CA., and all 67 employees, including co-founders Chad Hurley and Steve Chen.
Meanwhile, Google will continue to run a less popular video service on its own site.
"We are excited to have the resources to move faster than ever before," Hurley, YouTube's 29-year-old CEO, told the Associated Press during a Monday interview.
The deal is expected to close before the end of the year.
Copyright issues
However, some cynics have questioned the staying power of YouTube, which grew in 19 months from a start-up in a garage to now serve up 100 million videos daily.
While most videos posted on YouTube are homemade, the site also features volumes of copyrighted material -- an issue that has prompted some critics to predict the startup eventually would be sued into oblivion.
But Hurley and Chen have spent months cozying up with major media executives in an effort to convince them that YouTube could help them increase profits by connecting them with the growing number of people who spend most of their free time on the Internet.
The Google deal was announced the same day that YouTube revealed new partnerships with CBS, Universal Music Group and Sony BMG Music Entertainment to allow video clips and music to be featured on its site.
"YouTube is committed to balancing the needs of the fan community with those of copyright holders," Hurley said in a statement Monday.
The arrangement with CBS allows for short videos from news, sports, primetime programs as well as Showtime to be shown.
CBS said it will also offer brief clips from popular series such as Survivor and mini-previews for some of its new fall shows.
YouTube's truce with Universal represents a particularly significant breakthrough because the world's largest record company had threatened to sue YouTube for copyright infringement less than a month ago.
Google and online video
Up to now, Google has been hauling away huge profits from the booming search market, but it hasn't been able to become a major player in online video.
That should change now, predicted U.S. Forrester Research analyst Charlene Li.
"This gives Google the video play they have been looking for and gives them a great opportunity to redefine how advertising is done," she told AP.
In anticipation of the deal, investors pushed shares of Google up US$8.50, or 2 per cent, on Nasdaq on Monday to a closing price of US$429.00 -- a level not seen since late April.
In extended hours trade, Google climbed to US $431.55.
"This deal looks pretty compelling for Google," Standard & Poor's analyst Scott Kessler told AP.
"Google has been doing a lot of things right, but they are not sitting on their laurels."
Since the company started in Hurley's garage in February 2005, YouTube has blossomed into a cultural touchstone that shows more than 100 million video clips per day.
The video library is eclectic, featuring everything from teenagers goofing off in their rooms to William Shatner singing "Rocket Man" during a 1970s TV show. Most clips are submitted by users.
YouTube's worldwide audience was 72.1 million by August, up from 2.8 million a year earlier, according to comScore Media Metrix.
Google has around 8,000 employees and is based in Mountain View, California, in the heart of Silicon Valley.
With files from the Associated Press
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On Monday, October 9, 2006, Google Inc. announced its decision to purchase YouTube, the popular video-sharing site, for $1.65 billion in stock. Following the closure of the deal, YouTube will operate independently, "to preserve" its user community and its brand, the announcement said.

Eric Schmidt, CEO of Google stated "The YouTube team has built an exciting and powerful media platform that complements Google's mission to organize the world's information and make it universally accessible and useful. Our companies share similar values; we both always put our users first and are committed to innovating to improve their experience. Together, we are natural partners to offer a compelling media entertainment service to users, content owners and advertisers."

"We are excited to have the resources to move faster than ever before," co-founder Chad Hurley, YouTube's 29-year-old CEO, told the Associated Press during a Monday interview.

100 million videos are watched on the YouTube's flash based site every day, including professional movie and TV clips and music videos, as well as amateur content.