The overwhelming response to Google's $1.65 billion acquisition of YouTube has been positive, but not everyone is convinced that the online video site and the world's most powerful search engine will
make a happy pair. Mark Kingdon, CEO of interactive ad shop Organic, says Yahoo would have been a much more logical destination for the viral video upstart. While Google is a "link and list business,"
Yahoo is more of an expert at organizing content into channels--a big part of YouTube's strategy going forward, Kingdon said during his company's third-quarter earnings conference call. "I'm surprised
they didn't kick it up a few notches and make the purchase," he added. Yahoo was also involved in negotiations with YouTube, but it's understood that once the startup's founders heard of Google's
interest, there was only one place they wanted to go. Talk of video pervaded the interactive ad shop's quarterly earnings call. Kingdon pointed out that while Organic's client spending has increased
15 to 20 percent, many Fortune 1000 companies have yet to migrate from TV to the Web. This is because Web advertising companies haven't yet made online video appealing to them as a product. He says
Google, YouTube, MySpace and others have to come up with a better system. Thirty-second or even 15-second video ads obviously won't cut it--"people today are walking TiVos," Kingdon said, referring to
digital video recorders, which make it easy for viewers to skip TV ads. "If they see something that looks like an ad, they mentally look beyond it."
Read the whole story at Associated Press via BusinessWeek Online »
