Sony Pictures Acquires Grouper

Looking to cash in on the fast-growing user-generated content industry, Sony Pictures on Wednesday announced it had acquired Grouper for $65 million. Under the terms of the deal, the company would retain its independence, although it would work closely with a team at Sony Pictures.

"This acquisition demonstrates the breadth of involvement of Sony Corporation in the field of digital online entertainment," Sony Pictures chairman and CEO Michael Lynton said. "It makes sense to complete the circle by having Grouper be a part of Sony Pictures Entertainment, which itself creates so much content for people around the world."

Like its larger competitor YouTube, Grouper allows for portability of videos, giving users the option to post videos on their social networking profiles, blogs or webpages. Additionally, the site allows downloading of videos to portable devices such as the PSP and the iPod, and provides editing tools to produce videos for the site.

No immediate changes are planned for Grouper, although Lynton said in the future the company may use the site for premium and ad-supported content. Sony's CEO also said the site could even be viewed as a virtual auditioning room, where the company would be able to sample new ideas and talent from the videos users submit.

"A site like Grouper allows people to showcase their creativity to a vast audience," Lynton said. "It's like a virtual, global audition, and a great source of entertainment."

Even though Sony sung Grouper's praises, some analysts say an acquisition like this is not an answer to the company's problems. "It is an electronics giant which hasn't had a hit in years," Internet pundit Om Malik said. "[Sony] doesn't have a single must have device on the market."

"Music and movie businesses are going nowhere fast," he continued. "What [Sony] needs is complete revitalization, a focus and a plan -- maybe Grouper is the start of that, but I'm not holding my breath."