Showing posts tagged paypal

Facebook buys YouTube, why not?

So. The IHT has a wonderful article on Peter Thiel (founder PayPal, early shareholder Facebook). His life could have been different if he hadn’t failed to get a key legal position, instead he starts PayPal and the rest is billions of dollars of glorious history. His thinking is, people confuse capitalism with competition, sure there are overlaps but beating the other guy isn’t always best. Finding “creative monopolies” is what you should do. Not the Mr. Burns nuclear plant monopoly but creatively finding niches where you can prosper at least for a while, like Facebook has OR Pinterest will OR Google did. They never tried to kill their opposition, they just were more creative for long periods of time in growing new industries. 

Now. Google is poor at social networking. They really are. But they own YouTube which is growing and social. Still, they want to focus their efforts on Google +, a foolishness which will run its course soon. What they may want to do is to work on those platforms that still make a lot of money, and stretch them into  mobile and build on the world of opportunity that exists in local commerce and connected advertising. 

Then. They they could sell their assets that are really social networks that they will never have the DNA to grow and monetise properly. Say Facebook then buys YouTube for $10Billion+ in shares and cash, they get the video piece, they get the social network and they get the next generation and a super high valuation. Google gets out profitably and focuses on what they are good at. Why not?