Home » Internet Business » Viacom Sues Google for $1 Billion. Big Whoop.

Viacom Sues Google for $1 Billion. Big Whoop.

So Viacom took the predictable next step in the GooTube pissing match and sued Google for $1 billion.  Why is this irrelevant?

  • Because if Google takes the next logical step and goes through the motions of fighting the lawsuit, the companies will be in court for years.  (During which time Viacom’s content will become less relevant and YouTube’s platform will become more powerful.)
  • Because $1 billion in damages is absurd.  Viacom wants headlines–and is getting them.
  • Because $1 billion is also chump change in this league.  (The injunction is potentially more problematic, but would likely just force YouTube to do what it will eventually have to do anyway–develop better ways of monitoring what is on the site).
  • Because the lawsuit is just another negotiating move and will disappear when the companies finally come to terms.

Why won’t the Viacom lawsuit shut down YouTube the way the music companies shut down Napster?  First, because the resources Google can draw on to defend itself are about a million times as big as Napster’s were.  Second, because Google already has plenty of real distribution agreements with other real media companies that will view the Viacom fusillade as a chance to gain online market share.  (These media companies are not likely to suddenly switch sides and team up with Viacom.)  Third, Viacom doesn’t really give a damn how many people watch its content on YouTube–they just want to get paid what they view as a less-insulting amount for the use of that content.

The bottom line: If/when Google finally makes a concession or two, Viacom will declare victory, and the lawsuit will disappear.  Then, a couple of years later, when every media company in the world has a distribution deal with Google and Viacom’s content is even less of a percentage of total views than it already is, the deal will probably get renegotiated on more favorable (to Google) terms.

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11 thoughts on “Viacom Sues Google for $1 Billion. Big Whoop.”

  1. There’s a bigger reason why this lawsuit is silly: The law.

    Good post in Business 2.0 here: http://blogs.business2.com/beta/2007/03/viacoms_gootube.html

    “There’s one thing missing from most coverage of Viacom’s $1 billion lawsuit against Google and YouTube: the law. Sure, there’s copyrighted material on YouTube. But Google (GOOG) employees didn’t put it there; YouTube’s users did. And whether Viacom’s (VIA) lawyers like it or not, user-stolen content is treated differently under the law of the land.

    The Digital Millennium Copyright Act is pretty clear on this: The operator of an Internet service is not responsible for the content its users post, save for taking it offline when it receives a “takedown” notice from a copyright holder.” “

  2. That portion of the DMCA is going to be overturned pretty shortly. It basically allows inifinite piracy for profit, as long as your corporate office isn’t the one uploading the pirated material.

    But anyway, the whole Youtube purchase was a fraud from the beginning. It was designed to give Sequoia a 500 million dollar “thank you” from the Google execs.

    Sequoia invested 11 million into youtube, then 6 months later they instructed Google to purchase youtube for an insane valuation.

    Last month sequoia filed to sell every single share of Google they got in the purchase, and the founders of YouTube themselves filed to sell all their shares too. By now, the shares have been sold.

    Google never intended for Youtube to withstand any sorts of lawsuits- it was all just a scam to give sequoia 500 million dollars in instant profits.

    Back in the mania dot.com days, public companies bought tiny private companies for insane valuations every single day. The one commonality was the VCs or even execs at the large public companies made equity investments in the small companies a few weeks before the buyout.

    It was the biggest “open” secret of the day.

  3. Victor perma bull.

    incidently i saved the business 2.0 from last year where it proclaims google “the smartest company of course.” and has a segment “google as god”.

    i think alot of people will get a kick out it one day.

  4. Google’s been pretty savvy about when they settle and when they fight. Seems to me like Google picks fights it has a good chance of winning so they can establish solid case law in areas that are important to Google’s future.

    It’s not just about winning the case at hand — it’s about setting favorable precedents for future disputes.

    Google followed the law, and promptly removed infringing content when they got the takedown notice so there’s little downside for Google. If Viacom wanted press coverage, they’ve got it — but this press coverage will just make Viacom look greedy and anti-consumer to their audience.

    This case should strengthen precedent, make Viacom into a pariah, and burnish Google’s image among young, influential consumers. Win, win, win for Google.

  5. … and where is Microsoft in ALL this. We’ve got a 900lb gorilla who is either taking comfort in the idea that it is IT as far a operating systems software/the software space with cash to spare ala when the going gets tough buy your competitor and shut him down(Starbucks) OR, or you’ve an animal whose hands is tied by anti-competitive judgements and rulings vis-a-vis a bruising browser battle. (cont’d… )

    By the way ‘Has ANY-body heard a sliver of media news about Netscape these days? not to mention the founder who whipped out the internet innovation of the century!? Before the buyout rumor floated about Nokia, ‘What about the PALM?’ In the eyes of the media reporting world they’ve been clearly written out of existence!!

    … So what’s the 900-lb Gorilla contemplating doing besides propping up and an ip-lawyer in the attendance taking world… “HERE!!”??
    Has the the ‘Business is War’ ideology & landscape made avail to it
    a 1-step solution that will extricate it from the laggard race of the search/internet space??

    Hypothetical: Don’t be surprise if that 1-step has eroded into a 2-process. Buy e-bay and everything else will fall line. Provided execution is flawless!

    Google/yhoo search “invest_mavin”

    I can truely take solace in the fact that I’ve absolutely stopped getting frivolous calls to re-finance my mortgage!

  6. One the matter of Google…

    in Google’s eyes…

    As far as Google is concern ‘Google IS GOD!’

    The Politically Correct phrase of the day in Business

    ‘The Synchronization of Global Markets.’

  7. Just some observations. And I will admit I can’t quantify or validate all this so consider it for just what I said it was…observations.

    If you spend any amount of time on YouTube, it seems that an inordiantely large portion of the posted content is junk….lots of it is amateurish…and a lot of it borders on or points towards porn and porn domain names and urls…another problem that parents and the like will eventually catch on to and then Google/YouTuube will be dealing with something a whole lot scarier than Viacom…but I digress.

    I suspect that a lot of the quality and viewed content is pirated material(s).

    Most interesting to me though is that this seems to be where the situation remains. Pirated content just keeps on coming and YouTube acts the innocent and pulls it down slowly and begrudgingly.

    And, what if Viacom is only the tip of the iceberg? What if more big media content suppliers come after YouTube?

    Finally, YouTube is not unique (no surprise)…just first and big…VERY BIG…and backed by Google. But in a medium where you can come out of nowhere and knock the giant off his pedestal (remember Google and Microsoft?), why doesn’t anyone seriously believe that Google could get caught in the same trap?

    Just some random thoughts and observations. But I am not as enamored with Google, their YouTube purchase or YouTube itself, as others appear to be.

    Thanks for allowing me the opportunity to put these thoughts out there…comments???

    Mike Lynn
    Elephants Can’t Dance
    Marketing & Communications Consultant

  8. …and a lot of it borders on or points towards porn and porn domain names and urls..

    well, we know where you hangout on YT, Mike. 🙂

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