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The potential size of a video-monetized advertising market is orders of magnitude larger than that. From a risk-reward perspective, it's clear that Google sees this somewhat differently than you do.
It'll be interesting to see how quickly Google moves to consolidate the relative strengths of YouTube's service and audience with its own search/advertising model. It'll be interesting to see how well Google is able to maintain its focus through the haze of copyright-related litigation.
I suspect a year from now we'll all still be debating the relative merits of this very deal. Forgive me if I don't fully agree with you just yet: I'll watch and wait before rendering final judgment.
Carmi
http://writteninc.blogspot.com