Google Assumes YouTube Risks

Take that, Mark Cuban!

Google, once the new upstart Internet darling, acquired YouTube (the current upstart Internet darling) this week for $1.65 billion in stock. For Google, the deal solidifies its presense as a media provider and Internet user hub. For YouTube, well, did you read about the one-point-six-five billion dollars?

The marriage isn’t without its detractors. Many believe the current and inevitable pile-up of lawsuits YouTube attracts devalue the company’s worth. Just 10 days before the deal, media and professional sports maverick Mark Cuban told a group of advertisers that only a “moron” would buy YouTube and that the company would be “sued into oblivion.” Cuban himself is all too familiar with Internet acquisitions. The Dallas Mavericks owner made his money selling Broadcast.com to Yahoo in 1999.

YouTube members often post content belonging to film, music and television production companies without permission.

Hoping to eschew the copyright concerns that have followed YouTube’s reputation, YouTube executives said they had struck content deals with CBS, Universal Music Group, and Sony BMG, the partnership between Sony and Bertelsmann, right after the deal with Google was announced.

In addition to removing content once notified it is illegal, YouTube is taking additional measures, such as limiting uploads to 10 minutes (to prevent those who post entire television episodes or movies), and offering content owners a chance to approve their copyrighted material if they’re paid a share of the advertising revenue the content generates.