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by Mike Zazaian October 6, 2006 - 3:51pm, 2 Comments

Google May Purchase YouTube for $1.6 Billion

Google and YouTube are allegedly involved in talks over a $1.6 billion purchase agreement.

According to an article in the Wall Street Journal on Friday, Google and YouTube are discussing a purchase agreement that would bring the world’s largest video-sharing site to the world’s largest search engine for a sum of $1.6 billion US. The WSJ’s source for the subject was cited as a person familiar with the matter. The reports are unconfirmed, however, as both Google and YouTube have declined to acknowledge whether such discussions are taking place at all.

And while Google and YouTube are a bit touchy about the subject, analysts believe the acquisition could strongly benefit both companies. It’s damn cheap for a company that already has a global presence, said Trip Chowdhry, an analyst with the San Francisco-based Global Equities Research. YouTube’s brand identity is no less than Google’s and is no less than Coke’s. Shares of Google stock rose 2.2 in Nasdaq trading on Friday afternoon, up $9.11 to $420.92 per share.

Google’s own Google Video media sharing service claimed the most daily visitors until it was finally eclipsed by YouTube last February. YouTube’s growth has been exponential since then, now claiming over 30.5 million visitors daily, more than three times the 9.3 million users of Google Video.

[via Yahoo News]