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Contemporary media coverage suggests they wanted to buy out a competitor which became the dominant video site in a year. This New York Times article [1] from 2006 wrote:

"The acquisition of the privately held YouTube will enable Google to thrive in one area of the Internet where it has so far failed to gain footing. According to Hitwise, which monitors Web traffic, [YouTube] has the lion's share of online video traffic (...) a 46 percent share, MySpace has 23 percent and Google Video has 10 percent."

Meanwhile, this 2006 article from the Economist [2] stated:

"the deal is 'an aggressive, mature move for Google, one that shows that senior management is not too proud or stubborn to see that they can't build everything themselves,' says Henry Blodget, an analyst at Cherry Hill Research. Indeed, Google's Mr Schmidt freely conceded that YouTube is the 'clear winner', especially in creating social networks around its site."

[1] http://www.nytimes.com/2006/10/09/business/09cnd-deal.html

[2] http://www.economist.com/node/8031159

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