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Trends in Web 2.0

What Google's acquisition of YouTube means for Web 2.0

This story appears in the January 2007 issue of Entrepreneur. Subscribe »

It's hard to put a seriously negative spin on 's $1.65 billion acquisition of online video startup . But opinions differ on the exact import of the biggest deal to date. Some say the lofty sum paid by the deep-pocketed Google suggests the deal represents the high-water mark--or even the beginning of the end--of the Web 2.0 renaissance.

"I certainly don't think there will be another YouTube in [terms of] price," says Jay MacDonald, partner in media banking firm DeSilva + Phillips. MacDonald's rationale: As first mover in the online video space, YouTube naturally commands the biggest price tag, and anybody who follows will get less.

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