Acquistion rumors continue to trail YouTube

SAN JOSE, Calif.--Few Silicon Valley companies are dogged by more rumors than YouTube.

Talk of a possible acquisition of the white-hot video-sharing site drifted into discussions at the Digital Hollywood conference here this week. Few details, such as the name of the acquirer or the asking price, were included.

These kind of guessing games are nothing new to YouTube's executives, who scoffed at the idea that YouTube was for sale. "Really, was it a big number?" joked YouTube CEO Chad Hurley, after being told that rumors of a buyout were floating.

Hurley participated in a panel discussion at the conference, which is dedicated to tech companies in the entertainment sector. Another YouTube executive flatly denied the rumors and said such talk is all too common.

Indeed, conjecture often follows hot start-ups in the Valley. In YouTube's case, it's easy to understand what's driving the hoopla.

First, News Corp. Chairman Rupert Murdoch, an old-media tycoon, is receiving kudos as a new-media visionary after buying juggernaut network site MySpace. Conference attendees say plenty of other media powerhouses would love to hit a similar walk-off home run.

The privately held YouTube could offer a buyer some MySpace-like attributes. YouTube has more than 13 million unique users every month and presents more than 100 million video clips a day less than a year after the official launch. YouTube's fan base is a marketer's dream.

One media executive at the conference observed: "To our industry YouTube is a bright-shiny object."

While nobody claimed to know for sure whether any company was actively trying to buy YouTube, there was no shortage of guesses about which companies would likely benefit from YouTube. Among them are Time Warner, Viacom, Yahoo, Microsoft and Murdoch's own News Corp.

Perhaps helping to fan the acquisition talk: More than 200 companies are now trying their hand at user-submitted content. Analysts have noted the obvious, that many will merge or be gobbled up or simply not survive.

That would mean more rumors are bound to be circulated. On Tuesday, online gossip column Valleywag reportedthat an e-mail rumor had Sony and Grouper combining forces. Grouper representatives denied the rumor.