Google: We Do Know Evil

If you’ve read the latest posting by Mark Cuban today, a post that contained lots of info concerning Google’s buyout of YouTube.com, while it is not fact checked, and contains some speculation from the writer himself, Cuban says he trusts the source. Everyone remember when Google’s motto was “Do No Evil”? I don’t think that is necessarily the case anymore, and not just because they removed it from their site.

While this seemed good on paper Google attorneys were still uncomfortable with the enormous possible legal claims and speculated that maybe even 500 million may not be enough – remember were talking about hundreds of thousands of possible copyright infringements. Youtube attorneys emphasized the DMCA safe harbor provisions and pointed to the 3 full timers dedicated to dealing with takedown notices, but couldn’t get G comfortable. Google wasn’t worried about the small guys, but the big guys were a significant impediment to a sale. They could swing settlement numbers widely in one direction or another. So the decision was made to negotiate settlements with some of the largest music and film companies. If they could get to a good place with these companies they could get confidence from attorneys and the ever important “fairness opinion” from the bankers involved that this was a sane purchase.

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.

So, before Google signed the YouTube deal, YouTube signed content deals with major media companies, record labels, effectively giving them a piece of the pie Google was about to serve up, I saw somewhere it was about $50 million per large company. Part of the deal was the media companies couldn’t sue Google for six months, because, as they already knew from Google Video, you can’t flourish like YouTube was and protect copyright laws at the same time. They also requested, if this story is true, that the media companies pile the lawsuits on YouTube competitors, so they can’t flourish since they will have to protect copyright laws, and Universal did just that by suing two capable Youtube clones Bolt and Grouper.

Another paragraph in the post mentioned the media companies only had one problem, figuring out how not to have to share any of the money with any of the artists who ACTUALLY CREATED THE CONTENT. If the money was received as part of a licensing deal, they would have to share it, usually 50/50, so what could they do? They decided that the would receive an equity position as an investor that Google would then by from them. That way they could classify it as gains from an investment position.

Whew, no wonder they removed the Do No Evil, they would’ve had to have changed it to “We Do Know Evil”.

Infringement lawsuits will be served on Youtube and the new proud parent Google in the coming months. Google will respond with two paths: an expensive legal fight or a quick and easy settlement with most choosing the latter. Are there any larger copyright holders such as music publishers, movie studios, or unlicensed record label EMI that put up a fight rather than accepting the check?

Google’s motto would be more correct to be, “Your Internet Are Belong To Us.”