free html hit counter Between the Sheets - John Battelle's Search Blog

Between the Sheets

By - October 31, 2006

Blog Maverick reports ‘some intimate details of the Google YouTube deal‘, based on an anonymous source. Assertions, from the supposedly well-informed note, include:

* About $500 million of the 1.65 billion purchase price was earmarked to fight and settle copyright suits, as a large but not uncommon liabilities patch.

* As part of the Google courtship, YouTube massaged settlement negotiations with the largest potential DMCA stake-holders–far enough along to make it unlikely that their settlement claims would bite significantly into the margin of gain for Google.

* However, to appease the large media companies disinterest in sharing profits with the creative talent, the value was instead transfered as an equity investment in YouTube–sheltered from royalty burdens.

* Finally, to protect the value behind YouTube–its copious viewing audience addicted to pirated material—Google asked the media gatekeepers to ‘look the other way’ for a few months, as copyright violations continue to run rampant.

* And finally, according to this anonymous note, Google also asked the media powerhouses to belt competing video sites with lawsuits first–like “YouTube clones Blot and Grouper.”

“There are some interesting chapters yet to unfold. One is how much of this will become public. Google is required by the SEC to disclose material financial developments at their company. Working in Google’s advantage is their enormous market capitalization and revenues will give them considerable leeway to claim that a 50 million transaction is not significant to their business. If the other video sites have the wherewithal to put up a legal fight any decent attorney will demand access to Youtube acquisition documents. Expect a claim of collusion between Google and the media companies as a defense strategy.”

Mark Cuban adds, as a note on this source, “I can’t say this has been fact checked. It hasn’t. I can’t say its 100 pct accurate, I don’t know. But it rings true, and as I said, I trust the source.”

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2 thoughts on “Between the Sheets

  1. If any of these facts are true – these conflicts could possibly explain why the Yahoo negotiations did not go through. There was just too much potential baggage.

    Sooner or later, some copyright holders must realize that YouTube is giving them unprecedented publicity.

    You can’t insist on direct compensation for everything, sometimes long-term benefits must be factored in.

  2. Trogdor says:

    So Google convinces the MPAA, etc, to not sue for awhile, and even more extraordinarily, to go ahead and sue YouTube’s (now Google’s) competitors?

    There’s got to be something illegal there, to say nothing of unethical and, dare I say it, EVIL …