Late last week, the rumors began to fly that Google was thinking about buying Internet video site, YouTube for the princely sum of $1.6 Billion.  Well, the New York Times went and confirmed the rumors on Friday after talking with several people close to the deal.  It is stressed that the deal is in the very early stages at the moment and nothing is definite.

Google is just the latest in a parade of companies to visit and chat with YouTube in recent months.  This is just the latest in the frenzied buy-up of promising Internet startups, started by the Fox acquisition of MySpace last year, and is reminiscent of the Dot-Com boom of the late 90s.

If Google were to acquire YouTube, it would likely supplant their own video service, Google Video, which has not seen the degree of success the company had originally hoped for.  Integration of a successful video community site would open up new possibilities for the company in the area of cross-marketing and advertising.  At this point, all Google needs is a successful social networking site (Orkut was another relative flop) to essentially turn themselves into a one-stop-shop for all your Internet needs.

Is this recent frenzy to buy start-ups the sign of a new boom/bust?  Or is it a little bit more reasonable this time around?

10/9/06, 5:40pm -

UPDATE: It appears that Google IS buying YouTube, the news comes from CNN Money saying the deal was struck today.  Google claims that despite the acquisition, YouTube will operate as a separate entity.

Article: http://money.cnn.com/2006/10/09/technology/googleyoutube_deal/index.htm?cnn=yes