GooTube - I can’t quite believe this
I read this my mouth wide open. Some intimate details on the Google YouTube Deal - Blog Maverick. I can’t quite believe it. In fact, only Mark Cuban and maybe a dozen other bloggers could get away with posting it. Cuban’s basically posted something from a discussion group which claims that $500m of the $1.6bn purchase price of YouTube was put into escrow as a way of compensating media companies who were lining up major suits against YouTube, and that the money would be paid in the form of equity positions in YouTube which Google would buy back as a means of withholding royalties from the talent who created the copyrighted material.
It gets even more amazing when the post goes into the quid pro quo claimed by GooTube in return for these payments:
The first request was a simple one and that was an agreement to look the other way for the next 6 months or so while copyright infringement continues to flourish. This standstill is cloaked in language about building tools to help manage the content and track royalties, some of which is true but also G knows that every day they can operate in the shadows of copyright law is another day that Youtube can grow. It should be noted that Google video is a capable Youtube competitor with the ONE big difference being a much more sincere effort to not post unauthorized works - and Google fully appreciates what a difference that makes. So you can continue to find movie clips, tv show segments and just about every music video on Youtube today.
The second request was to pile some lawsuits on competitors to slow them down and lock in Youtube’s position. As Google looked at it they bought a 6 month exclusive on widespread video copyright infringement. Universal obliged and sued two capable Youtube clones Bolt and Grouper. This has several effects. First, it puts enormous pressure on all the other video sites to clamp down on the laissez-faire content posting that is prevalent. If Google is agreeing to remove unauthorized content they want the rest of the industry doing the same thing. Secondly it shuts off the flow of venture capital investments into video firms. Without capital these firms can’t build the data centers and pay for the bandwidth required for these upside down businesses.
I say again: I don’t quite believe any of this. I only posted it because it’s so jaw-droppingly fascinating in its paranoia. But clearly there were deals done. Clearly these deals are very interesting. Clearly Google’s next SEC filing will be pored over. And clearly Mark Cuban is in for an interesting 24 hours.

