Google YouTube

It is very likely that when the market closes on Columbus Day, Google and YouTube will announce a $1.65 billion acquisition stock deal.

Yet it seems that YouTube has already signed three content and licensing deals with CBS, Universal Music Group, and BMG Music. Will Google cancel these deals if they acquire YouTube?

Let's look at the windfall of about $1.5 billion if such a deal goes through. Hypothetically, Sequoia Capital will get a $500 million return on their $30 million initial investment. The founders will get a chunk of it too, and their 60 employees should walk a way with a couple of million each.

It goes to show that Google Video just turned out to be a bad product and YouTube is the answer to their video problems.

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Update!

Google, has announced that it will purchase YouTube for $1.65 billion in stock. YouTube will operate as an independent unit of Google once the deal closes and will retain the YouTube brand name. No YouTube employees will lose their jobs and Google will still maintain their own online video business.

CNN Money - Google to buy YouTube for $1.65 billion