This week, the FT.com had an interesting story on Google, Inc.'s (NASDAQ:GOOG) alleged travails with its newest property, YouTube. In other words, the company is trying to avoid massive copyright litigation.
This should not be a surprise. Hey, I actually did an interview with the CEO of vMiX, who provided some great insights on the topic (and perhaps some good warnings as well).
Interestingly enough, the rumor is that about $500 million of the acquisition's $1.65 billion purchase price has been reserved for possible litigation.
Actually, if history is any guide, copyright violation can be lethal for Internet property. This was the case with sites like MP3.com and Napster.
The problem is that Google needs to strike deals with all the big traditional media companies, or else not use the content (which makes YouTube less interesting). Also, might a traditional media company also sue for prior violations? After all, the media industry certainly sees Google as a big threat.
Basically, whether there are lawsuits or settlements, it looks like there will be a big payday for traditional media companies. In other words, content is still king.
Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.
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Reader Comments (Page 1 of 1)
11-03-2006 @ 11:21AM
John said...
Bambi Francisco of Market Watch interviewed a copyright attorney several days ago who said that he didn't think that it would be that much of a problem.
11-03-2006 @ 12:17PM
VC said...
Youtube is also being sued at the moment by.... wait for it. ..... utube
http://tinyurl.com/ydkmf9
11-03-2006 @ 9:12PM
John said...
But Utube wants to settle. I think a lot of these suits will eventually be settled or the entity suing Youtube will decide they would rather have Google on their side than against them.
11-05-2006 @ 3:56AM
Jon Kauffman said...
i think the media in all forms. needs to keep it's mouth shut for once in a while. whether it is reporting on stuff on iraq which is endangering the lives of the troops to copyright this and that.
1st mp3's and now possibly killing youtube. if alot of places and people sue youtube. that means theres a possibility that it could be shut down. After a while there won't be much of an outlet for anything because once that comes along the money grubbing companies and musicians and industries will find a way to take it and shut it down.
Metallica and the music record companies trying to play the victim with the MP3s. only fueled my fire as to why i download music and still do. You aren't a victim, we are. Have you seen cd prices these days lol.
Making 1 million or more a yr and complaining about it not being enough or trying to capitalize off of people who make less than them, and going after people who download music or use copytighted material on youtube. makes them the people with the money the pirates, not the individual who they claim is pirating the material.