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Google not spooked by ghosts of deals past

Every deal is unique. Every deal gets compared to past wins and losses. Most deals look good the next day.

Google's YouTube deal is worth just over 1 percent of the infamous January 2000 deal between AOL and Time Warner.

Former AOL CEO Steve Case has rued that deal publicly. Hordes of other Time Warner shareholders have suffered as well. Time's stock hit a high of $90 shortly after the deal. By the next year it was below $60. By 2002, Time Warner shares were below $30 to stay. They've now remained under $20 for over a year.

There's a clear look at M&A ghosts from the Internet world in CNET's Charles Cooper's perspective. Yahoo buys, creating a wealthy Mark Cuban. Terra bites Lycos. @Home buys Excite. That led to one of my faves: AT&T upping its stake in @Home by 15 percent. That cost almost $3 billion back in January 2001. Makes you feel good about paying your phone bill, huh?

In the current Internet era deals have gotten smaller, more concentrated. It is not yet clear that has reduced the long-term risk. Sequoia Capital got a lot of return on their investment in founding YouTube. We will not know for years if Google and its stockholders will get a bang for the billions they've just invested. Clearly Yahoo's flickr purchase and Newscorp's buy of MySpace's parent were modest deals compared to those free-spending days of yore.

This day after Google's deal for YT looks good to stock traders. Shares are still higher than they've been since July. New Internet millionaires always make the market giddy. Some commentators say GoogTube is the video network of the future, even commentators appearing on those old-fashioned cable channels. So far Newscorp has not destroyed MySpace. That bodes well for YouTubers.

Though we all see the copyright and ad-serving issues as complex, there's no obvious reason to think Google will mishandle YT. Old media will watch this merger very closely and there'll be no lack of user scrutiny. Nobody can doubt YouTube is more than 1 percent as valuable as AOL.