It has been so long since YouTube was acquired by Google that it is difficult to imagine or remember those times when the video platform it was a small corner of the internet that was just beginning to explode.
In November 2005, when YouTube was not even a year old and few people knew him, Google already had the service in its sights, and they were considering buying it for as “little” as $ 15 million, mainly so that Yahoo! don’t get it first. But, Google took too long to get the checkbook out, and this cost them more than 1.6 billion difference in less than a year.
If we had one more engineer …
Google, November 2005: Youtube is worth $ 10-15m
February 2006: Maybe $ 50m?
A week later: “we floated $ 200m and they didn’t bother to meet – they want $ 500m”. Eric Schmidt: “we won’t be pursuing”
May 2006: “Youtube kicked our butts”
October 2006: Google bought it for … $ 1.65bn. pic.twitter.com/P8LpD9BlLT– Benedict Evans (@benedictevans) July 30, 2020
Internal emails from Google leaked some time ago on Twitter and which have been gaining traction again, they show a more than interesting story about the point of view of Google when they began to think about acquiring YouTube.
Not only did they estimate the value of the platform at around 10-15 million at the end of 2005, but they were completely sure that they would have replicated all of its functions with their own platform (Google Video) by the last quarter of that year, and that “if they just had one more good engineer on the team, they’d be kicking YouTube’s butt“.
In February 2006, they already estimated the price at about 50 million, soon after the talks began. YouTube wanted around 500 million and Google offered 200. The figure was so ridiculous that YouTube did not even want to meet with Google, Eric Schmidt ended by saying that they would not continue to pursue the acquisition.
In May 2006 on Google they accepted that YouTube had made them bite the dust completely, it was they who got kicked. The growth of the platform was already viral, by the time the company acquired YouTube in October 2006 (less than a year after estimating its value at 10 or 15 million) the company ended up paying $ 1.65 billion for it.
In the history of technology there have been many “almost purchases” that could have changed everything, but unlike Blockbuster that did not buy Netflix for 50 million, or MySpace that did not take advantage of buying Facebook for 75, in Google they did not miss the opportunity, it was only 110 times more expensive than if they had managed to measure the true value of the startup a few months before. Something that, in short, is not easy at all.