Since 2006, many observers have scratched their head over what prompted Google to pay $1.65 billion for the video site YouTube. In a recent deposition, Google CEO Eric Schmidt explains why, CNET reports. The blockbuster acquisition for the 18-month-old start-up played a large role in sending valuations in the tech sector skyrocketing. Although YouTube made little revenue, the all-stock transaction gave Google control of a company many believed would change the face of mass entertainment. It also led to criticism from skeptics who thought Google would never get its money back. Google has revealed little about how it decided to pay $1.65 billion, but Schmidt said under oath last spring that he was willing to pay a premium–a big one–for YouTube. Leading up to the acquisition, Schmidt told Google’s board of directors that his estimate of YouTube’s worth was somewhere between $600 million and $700 million, according to court records. Schmidt said he believed Google had to offer $1 billion more than this value, or competitors–presumably Microsoft or Yahoo–would walk away with the increasingly popular video site…

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