Google rubbishes rumors of legal reserve in YouTube deal
At the recently held three-day Web 2.0 event summit at San Francisco, CA. Google's CEO Eric Schmidt rubbished a widely circulated rumor that Google has set aside $500 million to settle copyright claims by media companies as part of its deal to acquire video-sharing site YouTube. He further added that the rumors were not true. Google acquired YouTube for a whopping $1.65 billion, at a time when YouTube has yet to make a penny in revenue, as it was not monetized. A lot of television and media companies are not happy that their legal and copyrighted programming are frequently posted by people to YouTube's site.
The organizer of the three-day Web 2.0 event summit Eric Schmidt was interviewed by John Battelle on stage in front of more than 500 Internet industry insiders. In a two-part question, Battele grilled whether the Google's deal with YouTube included a secret section for legal claims from television and media companies. He also asked Schmidt, if Google was taking any steps in striking licensing deals with media companies to avoid threats of legal action. Even though YouTube has signed agreements with lots of media companies and studios, like Universal Music Group, Sony BMG Entertainment and CBS.
In his reply, Eric Schmidth said that the rumors were not true, when asked whether Google has set aside $500 million to take care of all the legal headaches. Celebrated blogger Mark Cuban claimed that late last month, an anonymous blogger posted a claim that he had very vital inside information on the secret reserve plan that Google had included in the deal when it acquired YouTube. The anonymous blogger claimed to be a digital media industry veteran. Mark Cuban then posted this on the Blog Maverick site. Cuban cleared the air that he did not verify the details and that he trusted the source. Cuban added that the rumor "rings true" according to him.
Just about a few weeks back, Google acquired YouTube for a whopping amount of $1.6bn in an all-stock transaction. The most expensive acquisition in the company's eight-year history. Both Google and YouTube gave their approval, which would officially be closed in the last quarter of 2006. Google gave the slip to Yahoo and AOL in the acquisition bid. Since the time it launched YouTube caught the imagination of people all around the world. YouTube ran with zero profit, till Google acquired it.
Google is a powerful search engine; it indexes so much material, which is owned by lots of people worldwide. The company is making it a habit of fielding complaints about copyright infringements. The company faces several copyright complaints and lawsuits in Europe, U.S., France, Germany, Italy, Israel, Germany and Austria. Google claims that the outcomes of these lawsuits have differed from jurisdiction to jurisdiction and that it has litigated similar issues in other cases. Negative results in these lawsuits may force Google to make a change in business practice, which could result in a loss of revenue for the company, which could seriously harm the business. Google is fully aware that some companies are waiting for the YouTube acquisition to be complete, and then it can expect some more additional copyright claims and lawsuits.
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