Why did Google buy You tube?

Seems like everyone’s an expert on this deal, but nobody knows why the search giant paid $1.6 billion (in stock) for YouTube. I’ve read reviews of the maneuver claiming it’s genius, and I’ve read critics who’ve panned the transaction. Personally, I have no flipping idea why it happened, and I’ll bet the folks at Google don’t necessarily know either. I’m sure they THINK they know, but that doesn’t seem to mean much in this wacky Internet world.

I’m reading a great book right now called “the Search,” by John Battelle. It chronicles Google’s rise to power and the emergence of search as the “killer app” on the Web. One of the most compelling themes in the book, and it comes up over and over, is that nobody in Silicon Valley seemed to care too much about search during the dot boom. In fact, nearly every player in the Valley had its chance to buy Google for a song at one time or another, but they all passed (for the most part). Even when Google got its first round of significant VC money ($25 million), the rationale for this investment, according to Battelle, was based on a false assumption that banner advertising would save the company if nothing else did. They didn’t predict the ad bubble bursting.

Perhaps the reason Google bought You Tube is similar to the reason why dogs lick their b***s…because they can. Google has lots of money. It already owns Boardwalk, why not buy Park Place and build a couple of hotels?

Only time will tell if this deal makes sense for either company. The funny thing is, however it turns out, Google’s reasoning for making the deal may never become fully known, and in the end, you can expect plenty of revisionist history (i.e. 20-20 hindsight) and someone’s gonna be either a hero, or a goat.