Tom Hespos, Jeff Lanctot, Dave Morgan, Pirouz Nilforoush and Tony Quin comment.

Tom Hespos, President, Underscore Marketing
Amid all the speculation, I was thinking that this would have been a much better strategic partnership than an acquisition. Even though it's an all-stock deal, I couldn't help but think the price paid was very high.

I thought that Google should have partnered with YouTube, providing a secondary social tagging mechanism and a way for YouTube videos to be easily located by Google Video Search, in exchange for a mechanism by which independent content providers and YouTube itself could profit from ad and sponsorship revenue. Of course, the terms and conditions for such a partnership would have had to address the copyright issue. In the end, though, I thought that the two companies could have easily worked together to build out a revenue model for YouTube. Such an arrangement also would have allowed YouTube to continue down the path of avoiding the pre-roll video ad model.

Today, I'm not so sure how YouTube will make money for Google. If Google is depending on ad revenue to pay for the YouTube acquisition, it begs the question of how a complex ad model can be addressed by Google's automated processes for selling advertising.

Of course, Google may have something up its sleeve already. I guess we'll soon find out.

Jeff Lanctot, Vice President and General Manager, Avenue A | Razorfish
With this deal Google has locked in the three biggest targets in the industry: AOL and Fox Interactive through partnerships and YouTube through acquisition. Regardless of the price paid, Yahoo, Ask.com and Microsoft must envy the triumvirate of deals Google has locked down.

Blogger, AdSense and YouTube have all been successful players in distributing and/or monetizing content. Video syndication is ready to take off, and that trio of services puts Google in a prime position when it does.

The industry hasn't seen a good water-cooler deal since Fox bought MySpace. Like that deal, the price tag for such a young company is what got people talking.

It's important to remember, though, that the $1.65 billion Google paid represents just over 1.3 percent of their market cap. While $1.65 billion is big for YouTube, it's pocket cash for Google. Google's current valuation allows them to make this deal with minimal risk to the business.

When thinking of search, where do most people go as a default? Google. When searching for video, what is the equivalent default? YouTube.

Google bought more than a website, they bought mindshare.

Dave Morgan, Chairman and Founder, TACODA
The acquisition of YouTube is a great deal for Google. It is their ticket to Madison Avenue, and besides, it gives them a critical audience and inventory growth engine in their battle for more audience versus Yahoo and Microsoft. Google has long talked about moving into the brand advertising space, but so far has lacked control of the kind of inventory that brand advertisers want. Now they have it.

YouTube gives them sight, sound and motion and a lot of audience. That's much more compelling to Madison Avenue and traditional brand advertisers than 25 words of text hanging off the bottom of a search or text content page, and nothing is growing faster now than social video.

I think that this will play out much like News Corp.'s MySpace deal. In another 12 months, all of the other big players will be kicking themselves that they didn't bid more.

Pirouz Nilforoush, Co-CEO, NetShelter, Inc.
On paper it looks like Google paid a hefty price to acquire the company. However, it will prove to be a brilliant move as it provides them with the level of video inventory required in order to capture significant ad dollars away from TV. Moving forward the biggest challenge will be monetizing the inventory, and that will largely depend on how they can create a safe environment where advertisers don't have to worry about damaging their brands by advertising on the site.

Brand protection is key.

Tony Quin, Founder and CEO, IQ Interactive
It was sort of poetic to see Mark Cuban say that only a moron would buy YouTube for $1.65 billion. It wasn't that long ago that he sold Broadcast.com, the last big video phenom, for $5.6 billion to Yahoo, then laughed all the way to the bank and beyond.

Of course, Cuban was referring to the potential copyright minefield that Google was walking into from all that lifted video and audio all over YouTube. But Eric Schmidt, CEO of Google, doesn't seem to be phased by the thought of lawsuits and is still raising the fair use flag.

A fair bet is that deep-pockets Google is fully prepared to prove its fair use doctrine in court and thus bolster its Pac-Man approach to getting content to feed its ad machine.

Of course, the bottom line is having more places to deliver Google's contextual ads, and at 100 million or so videos watched a day, YouTube has got plenty of avails.

Another thought is that this was also a defensive move at least for the short term, since it has been speculated that News Corp., Yahoo and Microsoft were circling YouTube.

Any way you slice it this is a great deal for Google since they bought YouTube for 100 percent stock.

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