• GigaOM, Tuesday, August 8, 2006 11:30 AM

Many felt that YouTube CEO Chad Hurley's stirring performance at Herb Allen's annual Sun Valley media conference signaled that his company would soon be acquired by the bigger fish circling the pond at the media mogul-fest. Of course, many believe it will be Rupert Murdoch and News Corp., thereby bringing together MySpace and its 80 percent share of the social networking with YouTube's 60 percent share of the online video market. But Robert Young of GigaOM says no way. At $1 billion, YouTube has priced itself out of Murdoch's bargain-hunting range. Young, speaking from his experience of selling Delphi to News Corp., says Murdoch prefers to use cash as his deal currency, not stock. That means the prospect of laying out $1 billion for a money-losing operation--particularly after shelling out $600 million for MySpace--is unlikely. As much as Murdoch would probably love to have YouTube, Young says the only practical way to buy a YouTube or Facebook is to create an alternative, like spinning off Fox Interactive Media (FIM), a public company, to do a stock deal. For this reason, Young says: "I would attach a very high probability of an FIM spinoff." Who else could swoop in for YouTube? He says Viacom/MTV, Google or most probably, NBC Universal.

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