Gartner says Google won't realize the advertising potential of recently acquired YouTube unless the search engine giant cleans up the copyright violations on the online video site.
Google could make big money on advertising in the purchase of YouTube, but that potential won't be realized unless the search engine giant cleans up the copyright violations on the online video site, an analyst firm says.
Gartner said in a recent news analysis that it expects Google to announce a cure for the copyright problem soon. A significant amount of the homemade video uploaded by users onto YouTube contains copyrighted material lifted from TV shows, DVDs and CDs.
Indeed, Google, which announced the $1.65 billion acquisition Oct. 9, is already feeling the heat from major media companies, some of which have joined forces in exploring the legal issues caused by YouTube's unauthorized use of their content, The Wall Street Journal reported Monday. Those companies include such entertainment heavyweights as News Corp., General Electric Co.'s NBC Universal and Viacom Inc.
Besides satisfying media companies, Google also will have to convince advertisers that they can eliminate the copyright problem, without alienating the millions of coveted YouTube users, Gartner said.
"Before Google and YouTube can achieve the payout, they must prove they have a cure for the copyright malady," Gartner said. "We expect they will announce a solution soon."
Another loose end that will have to be tied is Google's integration strategy for YouTube. So far, that strategy has been unclear, given that YouTube is to remain independent, Gartner said. The site already has partnerships with multimedia search providers, such as Blinkx, to whom YouTube provides a steady content feed.
"Google will need to innovate aggressively, if it seeks to differentiate its use of YouTube's content in its video search," Gartner said.
The market research firm expects YouTube content to eventually play a "prominent role" in Google's own online video search results.
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