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Case Title:

YouTube versus MySpace - Google's Dilemma

Publication Year : 2006

Authors: Amish Shah, Joel Sarosh Thadamalla

Industry: Internet and e-commerce

Region:US

Case Code: COS0053A

Teaching Note: Not Available

Structured Assignment: Not Available

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Abstract:

Both, MySpace.com and YouTube.com were the front-runners in the ‘user generated content’ Web site category, which witnessed a significant growth in the year 2005-06. Google, the Web search giant, signed a revenue sharing deal with MySpace in August 2006. MySpace owned by News Corp, was the number one among social networking Web sites. In October 2006, Google announced acquisition of YouTube, the leader in free video hosting and sharing Web sites, in a $1.65 billion stock deal

Google also had presence in social networking Web site category through Orkut.com and shared a small market share in the free video hosting and sharing Web site category throughVideo.Google.com

The race to gain maximum number of eyeballs had brought MySpace and YouTube into competition with each other. Analysts wondered whether Google’s deal with YouTube would lead to conflict with MySpace and intensify business rivalry. With interests in both the Web properties, how would Google strike a balance of interests to leverage significant returns, or keep the conflict of interests away?

Pedagogical Objectives:

  • To discuss the Corporate Strategy and Conflict Management
  • To analyse the impact of Business Rivalry and Emergence of a New Business Model

Keywords : Google; You Tube; MySpace; News Corporation; Video Sharing and Hosting Web site; Corporate Strategies Case Study; User Generated Content; Social Networking Web site; Web Search Engine; Internet Advertising; Emerging Media Opportunity; Corporate Strategy; Conflict Management; Game Theory; Competitive Strategies; Diversification Strategy; Mergers and Acquisition

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