Google Sees The Future Of Web Video

Google may have landed a knockout punch to the rest of the Web video market with its planned $1.65 billion acquisition of YouTube, but it's clear that the company is quite aware of the dangers of sitting on top of this market. The acquisition will test Google's ability to navigate copyright issues and push its technology infrastructure in new ways.

YouTube has been viewed by some content providers as a haven for pirated intellectual property, a player at the fringe of the legal system that would ultimately have had to open its wallet and curtail its rogue nature if it wanted to survive the first wave of lawsuits. Under Google's aegis, however, YouTube gains a certain degree of credibility, with Google promising to be attentive to complaints over misuse of copyrighted material. "We're aware of cases where video is offered by someone other than the copyright holder," Marissa Mayer, director of Google's consumer Web products, said Friday at a seminar presented in New York by Syracuse University's S.I. Newhouse School of Public Communications.

Mayer, who's one of the first 20 people to have been hired at Google, also made assurances that her company removes pirated content when it's contacted by legitimate copyright holders.

"The only way to know if a deal is good or bad is in retrospect," said Nathan Myhrvold, founder and CEO of Intellectual Ventures, who shared the stage with Mayer on Friday. Myhrvold, former chief strategist and CTO of Microsoft, added that video is certainly a valid investment, noting that as the communications infrastructure improves, it won't be long before Web videos are of high-definition, or HD, quality.

While it's unclear if YouTube can mature beyond grainy videos of synchronized dance moves on treadmills, as with the "OK Go" series, Myhrvold asked, "What happens when YouTube goes HD?"

Web video is an irresistible draw for Google, whose success is predicated on its ability to lure the audience that its advertisers crave. Search is a major component of video's success on the Web. If you can't find what you're looking for, what good is it? That's why Microsoft earlier this week said it would use technology from Blinkx.tv to provide search in some parts of its MSN Internet sites and Live.com.

The rivalry between Google and Microsoft will only grow more heated as they expand into new markets like video, Myhrvold predicted. But he also pointed out that there are different types of competitors in the business world. Some competitors will go toe-to-toe with similar products. Other moves are more strategic, where one company will dip a toe into a competitor's market just to stir up a bit of fear. Specifically, Myhrvold sees Google's Writely online word processing application as "a thumb-in-the-eye kind of deal" to Microsoft. Google bought Writely in March and plans to pair the application with its Google Spreadsheets.

Mayer acknowledged that not every move Google makes is designed to propel the company to the top spot in a given market. She sees Writely and Google Desktop as advancing technology and concepts, including Ajax and Web 2.0, that the company wants to succeed.

Of course, Web-based applications that resemble Microsoft's cash-cow products send a message to Microsoft's customers that there are alternatives to PC-based productivity tools.

The key to Google's continued success as it branches out in new directions is putting the right talent in place to execute on its vision, rather than thinking too much about the competition or even its own past successes, Mayer said. As successful as Google's search engine is, Mayer feels it could be better. "Search is superprimitive," she said. "It's disappointing that it's not advancing as much as we had hoped."

The ideal would be to bring the user the exact content they're looking for, regardless of whether it's text, photos, or video. Search will ultimately become more personalized, with the Google search engine having a profile of the user that can help better tailor search results based on factors such as where a customer lives and his or her occupation and preferences. Adding voice-controlled search queries that drivers can use from the road is another option on the horizon.

Google's success in the Web video space will be determined by a number of factors that all depend on the company's ability to expand YouTube's rudimentary capabilities. Google has to build out more bandwidth to ensure that video can be uploaded and downloaded without network bottlenecks.

The company is also exploring new advertising models that accommodate video, including having advertisers sponsor different videos. This model will have to be further developed to ensure that advertisers can accomplish their own objectives. A 30-second commercial isn't a good fit with a 30-second video, so advertisers will have to explore new models for getting their messages across. To the extent that Google can expedite this process, the company will ensure that the sponsored video advertising model works.

Google has shown itself to be a company unafraid of taking risks and taking on institutions like Yahoo and Microsoft. The legal, technical, and marketing questions surrounding Web video make YouTube Google's riskiest move so far, but also one with a huge potential payoff.