YouTube was an expensive purchase for Google. A price tag of $1.65 billion dollars is expensive, even if the company is Google. In a step to make YouTube into a consistent and growing profit center, there will full length films available on the video site:
“YouTube, the largest video-sharing website, will show full-length television shows and films from Metro-Goldwyn-Mayer’s archives in its latest step to boost advertising revenue by adding professional programing, the company told Reuters on Sunday.”
The traffic generated will increase Google’s advertising revenue. This is a fact that will not be lost upon Microsoft – nor Yahoo. In spite of publicly saying that it has no further interest in Yahoo, Microsoft cannot afford Google to surge further ahead in advertising revenue. That is simply not in Steve Ballmer’s game plan.