Tuesday, March 13, 2007

The Big Guns Come Out: Viacom Sues Google, YouTube For $1 Billion

Some of the smartest people I know are on opposite sides of the YouTube debate. One camp thinks that YouTube that was worth the gargantuan sum that Google paid for it, while the other foresees major troubles ahead, whether it be loss of market share because of the relatively easy replication of the platform (a danger most online media websites face: in the end, the value lies in community and the ability to hold onto it) or because of some kind of major lawsuit over copyright issues.

The announcement today that Viacom is suing Google for $1 billion over "unauthorized use of its copyrighted entertainment" is a pretty big test case. I would write "major test" except for the fact that Google is amongst that select group of companies on the planet for which $1 billion is but a pittance.

The suit centers around an alleged 160,000 uploaded "unauthorized" video clips. It will be very interesting to see if YouTube/Google will be able to cut a deal with Viacom to let these clips slide. It's entirely possible that Viacom is using the suit as a gambit to put it in a position to insert its content offerings online in a more "legal" (read: profitable to the company) manner.

There will undoubtedly be a flood of reaction across the web about this today and throughout the week. I'll try to add an update or two as this story plays out.

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