A media company seemingly lacking a business model? Maybe Apple should buy it...
...or not. Jan's post about the latest brewing business suggestion that Apple should buy YouTube betrays a strange trend in the news and blogosphere. Apparently, if a media-related company is either floundering or doing well but lacking a sure-fire business model, they're fresh meat for an Apple acquisition.
Remember the rumors of Apple buying TiVo last year? TiVo's stock shot up 17 percent simply because the rumors started making their rounds. Now these rumors of Apple buying YouTube are fluttering about, and they simply don't make any sense in my book. Apple already has a ton of branding invested in the iTMS - including a very, very healthy video offering - and (as far as I know) they're the only major service which offers their own YouTube-like, grassroots media outlet: the Podcast directory. As Jan also mentioned yesterday, anyone can get a podcast listed in the iTMS, so they've already traveled down the road of offering a strong dose of user-generated content.
These claims of YouTube being a perfect buy sound a little far-fetched too - no one can figure out how they're making money (NYT even admits that in their third paragraph), and the company has never dropped even a hint to clear up the confusion. As far as everyone can tell right now, they're spending kagillions on bandwidth without much of a business model besides 'place one or two banner ads.' Let's not forget this is also digg's 'business model' at the moment, and that "Kevin made $60m" story from Business Week was thoroughly debunked as being nothing more than an estimate; they don't have a dime of that money in their pocket. In fact, they're allegedly barely breaking even - and they don't eat nearly as much bandwidth as the video-intensive YouTube.
Which leads me to the mortal question: how would YouTube show Apple the money? Could Apple charge $1.99, or even $.99, for that hilarious compilation of funny cats? My gut reaction is 'probably not,' though given the things people pay for these days, I could easily be wrong there. Nevertheless, I just don't see how acquiring what must be a money-pit of a company could benefit Apple, when they already have most of the tools and features in place to offer YouTube-like services and community on their own with the iTMS.
Time, of course, will tell on this one, but my money is on Jobs and co. saving their check book for a different rainy day. Just because a company is up a creek without a business model, doesn't mean Apple should be the one to toss them a paddle.
