Tuesday, October 31, 2006

Intimate details on the Google YouTube deal

An anonymous experienced media professional shares some intimate details on the Google YouTube deal. This is a fascinating read on how Google and its new purchase YouTube are working with the big media companies that are planning to sue YouTube for the copyright videos. From Blog Maverick:
> Armed with this kitty of money Youtube approached the media companies
> with an open checkbook to buy peace. The media companies smelled a
> transaction when Youtube radically changed their initial 'revenue
> sharing' offer to one laden with cash. But even they didn't predict
> Google would pay such an exorbitant amount for Youtube so when Youtube
> started talking in multiples of tens of millions of dollars the media
> companies believed this to be fair and would lock in a nice Q3/Q4.
> [Note to self: Buy calls on media companies just prior to Q3/Q4
> earnings calls.] The major labels got wind that their counterparts
> were in heated discussions so they used a now common trick a "most
> favored nation" clause to assure that if if a comparable company
> negotiated a better deal that they would also receive that benefit.
> It's a clever ploy to avoid anti-trust issues and gives them the
> benefit of securing the best negotiating company. They negotiated
> about 50 million for each major media company to be paid from the
> Google buyout monies.
Not sure if everything that is revealed by this anonymous guy is true but I'm going to share this with some of my private equity/venture capital associates and friends to see if any of them can provide me with more information.

9 comments:

mr black said...

Looks like Google is going to rule the world.

BenN said...

So Google tell all the big media companies to sue YouTube competitors to drive them out of business. Brilliant!

ediiie said...

i dun get it. the media companies have been paid by google to allow the copyright videos to flourish in youtube for 6 mths and then wat?

Shy said...

How or what Google did behind the scenes with its YouTube acquisition doesn't really matter. It is still a risky buy in my opinion.

GeekGod said...

If this is true. The artists that belong to these media companies would want a slice of the money paid to them by GooTube.

Anonymous said...

The whole thing stinks!

Web 2.0 stinks!

Anonymous said...

The deal was an investment, not a licensing agreement, meaning all that cash the labels got they don't actually need to share with the artists they always claim they're trying to protect.

primus said...

this shows that google with all the money it has, thinks that it can do anything to get what it wants.

Myra Leong said...

Sounds like a bribe to me!

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