Short note: everyone keeps wondering in print if Google's 1.65 billion dollar acquisition of YouTube constitutes a bubble or, even better, "irrational exuberance".
I don't want to comment directly on moves like this by Google, but I can't help but draw a comparison between this acquisition and an acquisition that took place at my last company.
Google spent about 1% of its market cap to buy the most successful independent new site on the web, an amount equivalent to approximately 15% of the company's total cash on hand.
At the absolute peak of the bubble, March 15, 2000 (prior day's NASDAQ close: 4706.63), E.piphany, an unprofitable public company, diluted its share value by 25%, spending an amount equal to 7 times total cash on hand to buy Octane, a company with no real product or customers to speak of.
Yes, it really happened.
That's a bubble.
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