Finally, Google and YouTube sued for $1 billion over copyright infringement
Written on March 13, 2007 – 3:30 pm | by admin
What many people predicted after Google’s $1.65 billion acquisition of YouTube has finally happened. Basically, Viacom sued Google and YouTube to the tune of $1 billion dollars for copyright infringement regarding over 150,000 video clips hosted on the company’s servers. Surprisingly, the lawsuit has come less than 2 months after Viacom demanded that YouTube remove some 100,000 video clips from their site because of copyright violations; the move was a result of failed negotiation between the two companies to setup a licensing agreement for the content.
When Google bought YouTube, the latter was still not profitable and it had risen to fame in less than a year. YouTube’s young founder had not yet found a good way to monetize the increasing traffic and they were bleeding money due to bandwidth costs. The Google deal basically saved YouTube which would not have lasted much longer without another infusion of cash from investors.
The fact that many of the videos hosted on YouTube are violating copyright is no secret. The company cannot remove the videos fast enough. Many speculated that the reason YouTube got away with this for the longest time was the fact that the company was practically broke and there was no money to be made from a lawsuit. After the wealthy Google purchased YouTube, it practically sent an invitation to media companies to sue them. I guess billionaire investor and dot-com veteran Mark Cuban was corrected when he declared that “only a moron would buy YouTube!”
At the end of the day, however, this is probably nothing more than a tactic used by Viacom to get Google back to licensing talks with hopes for a better deal. I very much doubt that the lawsuit will actually go to court and it will be settled eventually with an agreement between the two companies. Going to court and losing would be a disaster for Google!
It is hard to image that Google did not consider the possibility of litigation before they purchased YouTube; they must have had a plan of how to handle this situation since the beginning and all that remains is to see what that plans was. Stay tuned!