YouGoog (GooTube?)

So how about Google's purchase of YouTube? This may be the biggest search story of the year, even if Search Engine Watch's forum activity seemed fairly quiet on the subject two days after the announcement. Nonetheless, Google may have permanently changed the future of the Web. Why? They've acquired a major new platform for ad distribution, and if anyone can parse video content for ad serving (which is fiendishly difficult) Google can.

The Independent Online complains "Google doesn't give a fig for copyright." But any pretense of intelligent argument is destroyed when Mr. Warner goes on to call Google's business model "legally dubious," which is just stupid. Kind of breathtakingly stupid, actually. Showing ads next to search results and on web pages is "legally dubious"? Hmm. Maybe we better call up the Internet and complain. Now where's that number? S'pose I'll have to Google it.

Of course, we can contrast Warner with Angela Mills Wade, director of the European Publishers' Council, whose alarmism over the future of search engines is hilarious and sad. No, you cannot control content on the Internet or even in a library; it is also an unpleasant fact that the fuel that these "search engines" run on is actually made of...HUMAN BABIES. Or it's going to be, someday. Or something. Heard this at a publisher's trade group meeting...think it was the "Whyever Doesn't Anyone Read Books Anymore?" roundtable. You just can't predict what these search engines will do!

All jeering aside, the buy is a major development. But it makes perfect sense if you know what to look for. As always, Google doesn't really care about content. They care about "indexing the world's information." (All you Google-dancers: just read the mission statement. It's all you need to know. Really.)

You can't index video for a lot of complicated reasons. Machines can't "see" or understand it. You can tell the machine what it is, but this is both inefficient (a truly adequate description of a five-minute video might run five pages) and begging to be spammed or scammed (which is why user-generated descriptions of web pages--the meta and keyword tags--are no longer considered relevant for search engine rankings). It's not terribly accessible, either. So Google has been very slow to adopt video; in many ways, their ad policies actively discourage it. On the other hand, big traditional companies love online ad video for "branding," or getting people to feel good about a product rather than making them immediately buy the product. (In a lot of ways this is lazy, fat-cat, Cretaceous-era thinking--we need a change--but hey.) Such "rich interactive" ads are typically brokered and placed by "ad networks," which are no match for Google overall but at their best can beat it in very small, highly targeted niches. Unlike Yahoo!, which basically takes the same approach as Google, the ad networks are real competitors, relying on different markets, methodologies, and formats.

Now the Web's biggest and most effective advertising publisher has purchased the Web's biggest and most effective video distribution platform. The likely results?

1) Ad networks will be seriously damaged, if not destroyed, as a business proposition. Many of them were (and are!) thinly-disguised link farm and spam site schemes. The best of the best will survive, but will become much less profitable in all but a very few industries.
2) Google will dominate video search. If it is possible to index video content, Google is likely to be able to figure out how to do it, especially if they're only working with one major format. Furthermore, an index method for YouTube may be "good enough," just as VHS proved to be "good enough" for the VCR.
3) Traditional branding and advertising is likely to suffer some major changes. Such people as media planners, ad reps, account executives, and other brokers are likely to be much less important in a Google-fied world. If video is made more trackable, much of contemporary branding (which tends to be a lot of very expensive smoke and mirrors) is going to vanish.
4) Copyright protection efforts will now be outsourced to copyright holders, a neat trick indeed. Google has the engineering and other know-how to propose a general digital watermarking standard, something that YouTube would never, ever, ever be able to do no matter how many people watched that video of the old lady and the mastiff, and once Google enables the standard then it becomes difficult to argue that they are fostering piracy. Content producers would have an easy option to mark their content, which could then be auto-excluded by Googlebots. Those who chose not to adopt the standard would suffer YouTubing. (Even better, if you wanted your content spread quickly, you could just leave the watermark off. Easy!) Google would take nonwatermarked content down if asked, but that would legitimately take a while. Just as Google's search algorithm favors a certain site format (hint: it's NOT Flash), so their watermark would provide an effective copyright defense.
5) Google is going to make a lot more money. More money, in fact, than you can probably conceive.

Right now YouTube gets about 100,000,000 views a day, and there's a lot of room to serve ads alongside those views. Even so, if 1% of the ads convert at a dollar apiece, that's still only about thirty million a month, or about five years before the Tube makes back the $1.65 billion purchase price (which was paper, but I'm also ignoring the horrendous bandwidth bills, so we'll squint and call it even). But the buy makes a lot more sense if it's 1% of your net cap to corner a major segment of your market.