Google gobbles You Tube for a cool $2.2 Billion

Reuters reports Web search leader Google Inc. has agreed to acquire top video entertainment site YouTube Inc. for US $1.65 billion (A$2.2)in stock, the highest price yet paid for a consumer-generated media site.

The first deal to value one of the new generation of user-participation Web sites at more than $1 billion combines two of the most popular Internet brands: Google, synonymous with Web search and rapid innovation, and YouTube, a Silicon Valley upstart that has spearheaded the video-sharing craze.

YouTube, which grew in 19 months from a start-up in a garage to now serve 100 million videos daily, has drawn scrutiny from major media companies for copyrighted television and music videos that users post without owner consent.

Reuters, Eric Auchard, quotes Oppenheimer analyst Sasa Zorovic: "YouTube is phenomenally valuable in terms of traffic and in the Internet sector this is important just like location is important in real estate."