Google's Folly: Yahoo exec mocks 'crazy' YouTube purchase

Corporate development guy at Yahoo also promises lots of acquisitions in 2011, more comedy

Google, you were so owned. Speaking at a tech panel in Silicon Valley last Friday, Yahoo senior director of corporate development Steven Mitzenmacher promised an aggressive acquisition strategy in 2011 following the relatively quiet past three years. (Also see: Yahoo says it won't shut down, but will try to sell, Delicious) Since 2008, the Internet pioneer has made only nine acquisitions, including content farm Associated Content and Arab Internet services company Maktoob. In contrast, search market leader Google made 48 acquisitions last year alone. Now, though, Mitzenmacher told a Global Technology Symposium panel audience, Yahoo is locked and loaded: "We’ve come out now…guns blazing." Then Mitzenmacher got his mouth to blazing. Taking part in a panel with dealmakers from Adobe Systems, LinkedIn and, yes, Google, Mitzenmacher dismissed the search giant's $1.6 billion acquisition of YouTube in 2006, calling it overpriced ("still crazy"). The Google guy disputed Mitzenmacher's assessment, the Wall Street Journal reports, maintaining that YouTube "has paid itself back." YouTube, the No. 3 Internet site, itself gets more traffic than all of No. 3 Yahoo. YouTube also dominates the video search market. Net revenue could approach $900 million this year, according to a Citigroup analyst. In contrast, Twitter is expected to generate $150 million in revenue this year, and has been estimated to be worth nearly $8 billion, or about five times what Google paid for YouTube. Other than all that, Mitzenmacher makes a good point.

Chris Nerney writes about the business side of technology market strategies and trends, legal issues, leadership changes, mergers, venture capital, IPOs and technology stocks. Follow him on Twitter @ChrisNerney.

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