Google vs. News Corp/NBC News: Bottom-Up vs. Top-Down

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Derrick has a great post about how YouTube Won’t Be Able to Match the Appeal to Advertisers of the News Corp/NBC Video Site.

That said, I wouldn't count Google out just yet.

Here's why:

Clearly the NBC/News Corp venture is all about creating another advertising medium not much different than broadcast/cable TV. That is a proven model of revenue and profit generation that goes back nearly 75 years.

But it won't replace YouTube (or its successors).

Why not?

Because NBC/News Corp. is a top-down approach (e.g. broadcast TV) and, as such, is different than YouTube which is P2P and/or bottom-up. There is plenty of room for both models.

And not only that...

I believe that the studios and Google could both have profited far more by working together than working apart. But, for whatever reason (e.g., "control") this isn't happening. As a result, both parties will make less money than if they had cooperated.

In short, we're talking about the demand for apples AND oranges. Why not sell them both in the same market instead of... well you get the picture.

We've seen this before -- remember how the recording industry "greeted" Napster? Yes, Napster is gone, but the recording industry ain't doing so well either. In fact they were so sick back then they couldn't attend the funeral of the goose that laid the golden egg.

The only one who could walk away under his own power was the customer who now controls the market more than ever.

This time it might be worse for the studios. Here's why...

The main difference between Google and Napster is that Google has deep pockets (Napster had no pockets) and Google has diversified the implementation of its technology. Oh, and their market cap is ... approximately a lot more than Viacom, et. al.

These are just a couple of reasons why I wouldn't bet against Google right now.


Mark Adams Author Profile Page said:

Speaking of apples and oranges, NBC and NewsCorp teaming up on anything is something that certainly gives everyone a peek behind the curtain of political punditry theater.

Next on YouTube: O'Reilly and Olberman holding hands, singing Kum Bay Yah.

BTW, NewsCorp stock is up 12% for the quarter and over 50% for the last 52 weeks (NWS). Murdoch is doing something right.

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