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YouTube Acquires Deep Pockets

Is it purely a coincidence that just six days after blogger Ernie the Attorney posted his performance of his Katrina song on YouTube, Google swept in and bought the company for a cool $1.65 billion? Perhaps. But one matter seems certain. The megadeal could have lawyers paying attention to the Web video site more closely than ever before.

As reporter Ben Charny writes at MarketWatch, "the transaction may trigger an avalanche of lawsuits by copyright holders whose videos were posted to YouTube without permission." Those lawsuits are likely to come not from major media companies but from individuals attracted to Google's deep pockets. Boston IP lawyer Lee Bromberg tells MarketWatch it's the "little guys" who are likely to file the most suits. He notes that Google and YouTube signed licensing deals with several major media conglomerates just hours before announcing the acquisition. "Everything gets subsumed by a licensing deal," Bromberg told MarketWatch. "There would be a release for any prior claim, as well as an agreement as to what use could going forward."

But "striking a deal with a major label is no prophylactic against lawsuits," says The Register, echoing entrepreneur Mark Cuban's sentiment that the deal is "moronic."

Cuban's argument is simple. Much of YouTube's content is copyright clips, and the company has built its business on the back of someone else's creative works.

The upshot, says The Register, is that "Google has overnight achieved world domination in one, possibly illegal, and poorly monetised market."

But it will always have Ernie. Or will it?

Posted by Robert J. Ambrogi on October 11, 2006 at 04:36 PM | Permalink | Comments (1)

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