Not exactly the same target audience, it could be different core consumers, but with the same spread target consumerstrategic alliances enable business to gain competitive advantage through access to a partner's resources, including markets, technologies, capital and people.
3 ordinary guys with different backgrounds, they worked in a same company
the team’s resources were focused on creating a community that fostered the discovery and sharing of videosUltimately it was a stroke of genius, immediately setting them apart from their fledgling competitors whose sites were dominated by sponsors, pop-up adverts and mini commercials. Besides hosting videos, this service lets the users to rate the videos available on the site, add their comments, and subscribe to their favorite producers.Videos can be watched directly on the website or they may be embedded in other locations, such as blogs and other websites. This means that you can view videos without being actually on their site. It also means that you can use the site as your store house for video contents to spice up your own website.also protecting or removing the content based on the owner’s rights.The community grew with millions of viewers per day and even create Youtube artists. This is what interest Google.
As the company grew, they were always facing bandwidth, growth, and storage issues. They need to finance the usage of the bandwidth because of the large amount of user. By that time, every minute a total of 24 hours video is uploaded. The bandwidth cost were estimated half a million dollar per day.By the time, it was the biggest offer that Google have ever made. They still get to run things their way, which is how we can keep our culture alive, not only in our office, but in the YouTube video community as well
In developingalliance it shouldn’t be just because the leaders thinks that it seems to be the right thing to do or in line with existing trends. It is essential to develop a mutually beneficial vision, along with the ability to look at the future prospects and not become dependent on your alliance partner. In this case, google do acquire youtube, but they have the privilege to run their company independently.However, if you become too independent, you may no longer need an alliance partner. You need to develop the vision to work towards becoming interdependent.Google CEO Eric Schmidt: "what tipped us over was not the great business success, but the vision they had for delivering content to users. It was the same vision in serving their users as Larry Page and Sergey Brin had in founding Google."
It pays to be open to new and unexpected opportunities and to be curious about alliance possibilities.
Google would need and believes they can have A business model to convert the site into an advertising mediumA big change in the worldwide media economy. In 2007 they have revenue of $9.3 billion.
A lack of communication can lead to the failure of an alliance. Even though Youtube is independent, they still find that it isimportant for every business owner needs to focus on transparency and effective communication.
Some YouTube members were worried that Google's advertising strategy would create inconvenience to their video viewing experience. Google have foreseen members' anxiety. Not all videos feature advertising -- only videos with a lot of views or creators with a large subscription base get to participateThey simplify the advertisement by adding overlays -- transparent banners that appear at the bottom of videos about 15 seconds after the clip begins to play. Although an overlay partially obscures the video, YouTube claims that users find the ads more helpful than annoying.They used their community oriented communication approach, and jokingly apologized, explaining they needed the cash to fix the office sink. Users flocked to their website, considering it to be anti-establishment and independent.
If the adopted alliance structure is complex, you should keep all the details and documents organized. This helps to develop a long-lasting and profitable alliance.Google’s culture is informal, equal, involvement, and empowerment and it has an aversion to bureaucracy. They feel that if they operate with very little bureaucracy it will encourage their engineers to develop good ideas at a faster pace. (http://www.oppapers.com/essays/Google-Organizational-Structure/192285)Before google bought Youtube, Youtube has only 63 employer. Now they have 350.
They have the same value for Leisure
You should develop leadership that highlights your willingness to focus on getting things done, rather than being obsessed about being right all the time. This will affect and determine the success of your alliance. This attitude should be present at the very beginning of starting the business.The founders and the team built a system that relied on the community and content, provided people with the tools to protect that community.
Google also have a team of experts that is diverse on nationality that has a big passion for what they are doing. In the website they even mentioned that they value ability more than experience.
Compassion and tolerance are characteristics that companiesshould strive to maintain in an alliance. It help alliance to handle difficult situations and maintain the company’s sanity.Even though Youtube is an independent to Google, when it comes to lawsuit, Google stood up behind youtube. It shows Google’s commitment to solve the copyright.Viacom, demanding US$1 billion in damages, said that it had found more than 150,000 unauthorized clips of its material on YouTube that had been viewed "an astounding 1.5 billion times“Since Viacom filed its lawsuit, YouTube has introduced a system called Video ID, which checks uploaded videos against a database of copyrighted content with the aim of reducing violations
Google and YouTube remain separate entities after the acquisition and they continue to play their own individual strengths, Google's being search and innovating, YouTube’s being a leading content destination with a base of users who create watch and share videos.For YouTube, it was building audience. Revenues didn't matter, profits even less. What mattered was that visitors were viewing 100 million video clips a day. YouTube founders now have to help Google figure out how to make money from all that traffic without alienating users
Partnership And Alliances
Web Alliances:<br />Google and Youtube<br />Octa Ramayana – MICM 2010<br />
Alliance Defined<br /> A strategic alliance is when two or more businesses join together for a set period of time. <br /> The businesses, usually, are not in direct competition, but have similar products or services that are directed toward the same target audience.<br />Source: www.1000ventures.com<br />
How to Make Alliances Work<br />Vision<br />Curiosity<br />Communication<br />Organize<br />Leadership<br />Compassion<br />Contracts<br />Source: www.morebusiness.com<br />
How Did Youtube do it?<br /> Community focused<br /> Ad free (at the beginning)<br />Interactivity (rate, comment, and subscribe)<br /> stay viral without even have to go to their site<br /> Automate DMCA (Digital Millenium Copyright Act) process<br />
If You Can’t Beat Them, Buy Them!<br />$ 1.65 billion<br />
Vision<br /> Corporate vision: ‘a mental image of the possible and desirable future state of the organization’. (Richard L. Lynch, 2000)<br />“to organize the world's information and make it universally accessible and useful”<br />“to provide fast and easy video access and the ability to share videos frequently.”<br />“delivering access and content to users”<br />
Curiosity<br /> Organizations should keep looking for opportunities to raise their profits and improve their capabilities. <br />
Curiosity (What’s in it for me?)<br />Expert in computing, communication, and monetizing web content, <br />Number 1 search engine and 1st most visited website <br />Capital stability<br /><ul><li>Billions of view per day
Hundred thousands of new video uploaded everyday
4th most visited website (alexa, 2006)</li></li></ul><li>Communication<br />Transparency<br />Effective<br />
Organize<br />Organizing the alliance structure and procedures can have a huge impact on the longevity and ultimate implementation of the alliance.<br />Google’s organization culture: informal, equal, involvement, and empowerment and it has an aversion to bureaucracy<br />
The Winning Team<br /> “The team believed in the project and in each other. It was about trust and friendship.”<br /> “The biggest challenge of any startup is to find the right people to build a successful company. You need a team to work well together to make it a reality. It’s the thing you can’t lose sight of. And, have fun along the way.”<br />Chad Hurley – One of YouTube founders<br />
Reference<br />Arrington, M. (2006). http://techcrunch.com/2006/10/09/google-has-acquired-youtube/<br />Google. (2010). http://www.google.com/corporate/<br />Kotelnikov, V. (2007). http://www.1000ventures.com/business_guide/strategic_alliances_main.html<br />Morebusiness.com. (2007). http://www.morebusiness.com/running_your_business/businessbits/business-alliances.brc<br />Solis, B. (2008). Chad Hurley on the Beginning, Rise, Acquisition, and Future of YouTube http://bub.blicio.us/chad-hurley-on-the-beginning-rise-acquisition-and-future-of-youtube/<br />http://en.wikipedia.org/wiki/YouTube<br />Stone, A. (2006). http://www.bloggingstocks.com/2006/10/12/how-to-build-the-next-youtube-five-lessons-from-the-google-deal/<br />