Google Bought YouTube for $1.65 Billion in 2006. The Streaming Platform Is Now the Main Driver of a Roughly $93 Billion Business at Alphabet.
YouTube will likely go down as one of the greatest acquisitions of all time.
Overview
Most investors prefer companies to avoid making major acquisitions. Such deals are time-consuming, can destroy equity in the near term, and don't always end up being accretive enough to earnings to justify the upfront costs and the resources spent to integrate a new business into the buyer's ecosystem.
But if an acquisition is done right, it can be an absolute game-changer that takes a company to the next level. One of the best examples in history is arguably Google's $1.65 billion, all-stock purchase of YouTube in 2006. At the time, Google's market cap was only $130 billion, and streaming was still in its early days.
Details
Since then, YouTube has paid for itself many times over, and it's now the main driver of a nearly $93 billion business at Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), which became Google's parent company in 2015 in a corporate restructuring. And YouTube's growth shows no signs of slowing.
Source
Originally published at www.fool.com.