Rumor: Google In Talks to Acquire Brightcove for $500-$700 Million
According to a tweet by Mark Glaser from PBS's MediaShift, Google is in talks with the white-label Internet video provider Brightcove and wants to acquire the company for up to $700 million. Brightcove's customers include a large variety of large enterprises such as the New York Times, Showtime, Universal Music, AMC, AOL, and the Weather Channel. If this rumors turns out to be true, this acquisition would easily turn Google into the dominant commercial Web video provider.
While Brightcove started out as a consumer video service, the company's half-hearted attempts at convincing consumers to host their videos on Brightcove.TV came to an end when Brightcove shut down that site in November 2007. Last November, Brightcove also shut down its free Brightcove Network, which featured content from roughly 40,000 publishing partners.
This June, Brightcove's CEO Jeremy Allaire told Sillicon Alley Insider that the company was now profitable and that he expected the company to see a 50% revenue growth in 2009.
Is Google Buying Brightcove's Tech or Its Customers?
While Google could obviously offer the same kind of services Brightcove currently offers on its own YouTube platform, Brightcove has already locked in most of the customers that Google would also be competing for. Also, while YouTube was designed as a consumer platform (even as Google is slowly moving to featuring more commercial content on the site), Brightcove has set up a platform that gives enterprise customers the flexibility and metrics they need. In the end, though, if this rumor is true, Google is most likely more interested in Brightcove's customer base than in its technology.
We asked both Google and Brightcove for a comment about this rumor and will update the post when/if we hear from them.
Update: as Dan Rayburn points out in the comments below and on his blog, Brightcove's setup requires its customers to use third-party content-delivery networks like Limelight to stream their videos. If Google really acquires Brightcove, this could turn out to be a problem, as it would keep Google from being able to use YouTube's (cheap) infrastructure.
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Google's hosting and CDN services do not support streaming protocols, Flash streaming, Windows Media streaming etc.... so they either have to adopt Microsoft's platform, which I don't see happening, or they have to continue to use a third party CDN, which keeps them from using the YouTube infrastructure which is so cheap.
That's a major technology hurdle Google would need to overcome.
Thanks Dan - interesting observation. Do you think that's a deal-breaker for Google?
Don't know if it's a deal breaker, since this is Google we're dealing with, anything is possible. Maybe Google will keep this content on Limelight or another third party CDN, but then that would go against the strategy of the rest of the company when it comes to how they deliver content.
@Dan
Unless of course, Google has a CDN in the works to compete with Amazon's S3 & Cloudfront.
It's a big "What if"... but, this would be a great way to show off some high-level clients when/if it rolls out to the public.
Wow! I see the B2B play for YouTube.
Posted by: Jason Cronkhite
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September 16, 2009 12:06 PM
A deal like this would certainly aim to increase traffic to YouTube with professional content access along with a professional management layer that would provide GooTube more monetization opportunities. Thus, a deal like this follows Google's MAX strategy in that if it can help generate more ad revenue and stickness toward google properties, customers and affliates then it's a good deal in Googles eyes. Now, Brightcove's customers on the hand might now welcome the deal so much being professional content creators and the purpose of using Brightcove is to further enhance revenue with the platform. It's a sticky deal and Google stands to gain alot but do consumers and Brightcove's customers is the ultimate question. Technology is not the hurdle here.
I've confirmed the rumor is false:
http://blog.streamingmedia.com/the_business_of_online_vi/2009/09/confirmed-google-rumor-false-not-acquiring-brightcove.html
Oh, it's real a good fortune, I just don't know to Google or Brightcove.
This is Google's way of creating a video ad platform. They have Ad Sense for contextual, Doubleclick for display and now Brightcove for video. YouTube will be the largest video provider in their network, which will then allow them the opportunity to monetize it with the Brightcove video network ads.