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October 9, 2006

Google YouTube game still on

Posted by David Hunter at 1:12 PM ET.

In today’s Internet video news, the Microsoft Blinkx deal looks like it will shortly be put in the shade as Andrew Ross Sorkin’s NY Times DealBook Blog reports:

After marathon negotiations over the weekend, Google could announce a deal to buy, the popular video-sharing Web site, for about $1.6 billion as early as Monday afternoon, people involved in the talks said.

Barring a last-minute snag in the talks, the boards of both Google and YouTube were scheduled to hold separate board meetings on Monday to approve the deal, with an announcement possible after the close of regular trading. Discussions could still break down, however, or another party could present a more-attractive offer.

As for the persistent worries about YouTube and copyright violations, YouTube just made some new friends as Chris Williams reports at The Register:

YouTube moved toward full legitimacy today with a trio of deals with media giants.

Universal Music Group boss Doug Morriss had previously described YouTube as a “copyright infringer” which owed his firm tens of millions in royalties.

Now it seems he has acquiesced to the increasing distribution strength of YouTube, as have the big wigs over at Sony BMG.

The latter has properly gotten into bed with YouTube, with a carve-up of per-click advertising revenues on pages carrying its content. Universal has stopped shorter, inking a “strategic partnership” instead. YouTube will simply pay it for each music video or user-generated video that uses its music.

Warner Music embraced YouTube in September. Three of the big four record companies are now on board, with EMI the lone dissenter, though a deal is inevitable. Smaller record labels have been posting music videos to YouTube for months.

The CBS television network signed up as well as described in the rest of the article. It’s great when a plan comes together. I’m sure that Morriss’ chest beating was mostly in pursuit of better terms since it surely did not escape his notice that Internet music videos are mostly advertising for his product.

Meanwhile, Google was covering all the bases with its own record label deals:

Google said Monday that it had signed agreements with both Sony BMG and Warner Music Group to stream each company’s catalog of music videos free from its Google Video service. The deal would also eventually allow the company’s AdSense partners to also stream the videos as well.

The Mountain View, Calif. based search company is working on technology that would allow Google Video users to incorporate Sony BMG and Warner content into their own content submitted to the service. Such capabilities would be provided for free.

The financial terms are discussed in the article, but that part about the AdSense partners is interesting. They’re the third party publishers carrying Google Web advertising and it sounds like Google is buying them a license.

Filed under Coopetition, Google, MSN, MSN Soapbox, MSN Video, Microsoft, YouTube

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One Response to “Google YouTube game still on”

  1. Google buys YouTube -- Microsoft News Tracker Says:

    [...] This morning’s Microsoft Blinkx tie-up story may have turned out to be a dud, but the Google YouTube acquisition rumor panned out to be US$1.65 billion of gold: Google Inc. announced today that it has agreed to acquire YouTube, the consumer media company for people to watch and share original videos through a Web experience, for $1.65 billion in a stock-for-stock transaction.  Following the acquisition, YouTube will operate independently to preserve its successful brand and passionate community. [...]

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