Google overpaid for YouTube by c 220%+ ?

Well, we as well as many others felt they had overpaid, and now we know they did - Google valued it at about $600 - 700m when they bought it (see here at Mashable). Paying $1.65bn is a large premium of c 220% assuming the higher valuation. So why did they do it? Schmidt:

It’s simple: if they hadn’t done it, someone else would. Here’s what Schmidt told Viacom’s attorney Stuart Jay Baskin:

“This is a company with very little revenue. (YouTube was) growing quickly with user adoption, growing much faster than Google Video (Google Video), which was the product that Google had. And they had indicated to us that they would be sold, and we believed that there would be a competing offer–because of who Google was–paying much more than they were worth…We ultimately concluded that $1.65 billion included a premium for moving quickly and making sure that we could participate in the user success in YouTube.”

Was it worth it - Mashable thinks so:

From our perspective – and here at Mashable (Mashable) we focus on the users – it’s a no brainer. Three years after the deal, there’s only one important social video sharing site out there, and it’s YouTube. Somewhere along the line, YouTube may lose its luster, but as it stands right now, it’s one of Google’s most important assets, and that alone says a lot.

A small quibble, if I may - words like Asset, and Value, get badly diluted in Newspeak 2.0. These words' original meanings are based, however, on the basic principle of gaining positive returns at some point. Being important by dint of massive subsidy is, well, its an approach, but its not sustainable, its not creating value at that point, and as for counting it as an Asset - accountants define an asset as something that gains, not loses, a business money.

At the moment, the value in this asset is accounted for by a large amount (120% too much?) of Goodwill and not much else. It needs, really needs, to start to make money.