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International Issue: November 2006
Feature
Web 2.0 the Rescue?
If operators play their cards right, Web 2.0 can pave the way to fixed-line revenue growth
by Sandy Aitken
The announcement last month that Google would purchase video-sharing site YouTube in a deal worth US$1.65 bn seemed to most commentators as being fairly unsurprising.
Moves such as the acquisition of Myspace by Rupert Murdoch’s News Corporation showed that Web 2.0 is at the very least something that could not be ignored, and at best something capable of generating an immense amount of revenue.
Therefore, the move to combining Google’s dominance of search with the world’s hottest portal for user-generated video content seemed, in retrospect, an obvious move.
Fixed-line operators cannot have shared in this complacency. With voice markets becoming saturated, revenue growth for operators in the consumer market is now dependent on increased usage of existing services and the adoption of new data services.
With hundreds of millions of videos viewed daily, watching YouTube proved to be an innovative data service that broadband subscribers actually wanted. Google’s acquisition combines the popular movement that is YouTube with an advertising model that will generate revenues, and increasingly establish a legitimate channel for music videos and other premium content.
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