14 DAY TRIAL // Mark Glaser from MediaShift has recently posted a tweet in which he disclosed a future deal between Google and Brightcove, the Internet video platform provider. From his sources Mr. Glaser valuates the deal around $500 - $700 million. Even if not yet confirmed by official sources, the acquisition has already spurred some controversy and anxiety in the business world.
The deal makes a lot of sense from a commercial point of view, but is totally mind-boggling as a technical implementation. We say this because to set up a Brightcove video platform one must use Limelight technology (a Google competitor), which will be quite a big problem since Limelight is very costly to implement. But judging on recent Google acquisitions, the “tech” part of a business never stopped Mountain View executives from making a deal, since the tech department seemed to be up to the task on every other project that they've tackled.
More sense makes the business side as it's poised to shift some clients toward Google's portfolio. Brightcove initially started out as a user-generated video sharing platform, just like YouTube. Since Google's little baby absolutely crushed all other opposition when it came to video sharing, Brightcove shut down the project in November 2008, since then supplying video platforms for many powerful companies.
While YouTube hasn't managed to make itself very attractive to the business side of the web, Brightcove amassed a huge portfolio with the likes of AOL, Fox, Universal, Showtime, New York Times, Discovery Channel, Sony-BMG Music Entertainment, Warner Music, Washington Post, The Weather Channel, the Obama Presidential Campaign, Philips, Sun, GM, and others as their clients.
This is a very impressive portfolio, and maybe this is why Google is paying this huge price for a “dead” service. Even so, Brightcove, through its CEO, Jeremy Allaire, told Sillicon Alley Insider that even if its consumer platform was down, its business video platform had managed to turn huge profits and even pull a 50% growth in revenue since 2008.
If they decide to keep Limelight or implement Brightcove using YouTube's network infrastructure, the deal is bound to bring Mountain View execs a lot of cash flow and new clients for the next years. UPDATE: Brightcove and Google representatives have denied any talks about any collaboration or future acquisition.