It is surely an understatement to observe: "Competitors who rely on the same setup as YouTube," said Heberger, "where it's all user-generated content, they might be in trouble facing a Google-YouTube team." (Mills & Sandoval, 2006)
The impact of the federal government upon economic behavior in this instance is clear -- there may have been grounds to contest the merger of Google and YouTube, especially as Google has its own video service already. The government's action or inaction has changed the future of the Internet. Moreover, although the market structure of providers is relatively concentrated, the social diversity of the users of the services of Google and YouTube is unprecedented. Every person's lives are affected, provided they use the Internet
What is the downside for Google? On one hand, people could begin to lose interest in posting on YouTube, as YouTube is not a strictly essential service, like a business' use of a computer mainframe like Windows. "Baked into all these predictions are the assumption that online video really is the next big thing in Internet content and that its popularity can translate into advertising sales. Certainly, Google's executives think that's the case and were willing to spend big on YouTube, despite having their own video service and a reputation for steering clear of major acquisitions," and banking on the continued...
"This is the first time in history where people can shoot, edit and distribute videos," and the technology is so new, the wave of public interest, industry insides speculate, is still cresting (Mills & Sandoval, 2006).
When YouTube first came out, there were fears that copyright legislation might inhibit the posting of television shows and advertisements, but rather than contest the questionable right of third parties to post such clips, many companies and artists seem to welcome the free added attention and buzz YouTube gives to their products. There also seems to be little downside for the consumer regarding this acquisition, presumably the reason the government allowed Google to make its move. The only downside is for Google's competitors Yahoo and Microsoft. Because other companies wish to compete with Google, and are unwilling to cede this particular market space, "now the value for every other video-sharing company is rising with the purchase of YouTube, said analysts" (Mills & Sandoval, 2006). This merger seems to be a win-win scenario in the short run, for everyone but Yahoo and Microsoft, but at least in the short-term, video-sharing companies are likely to remain in the news as Google's competitors attempt to generate interest about new sites.
