• Financial Times , Friday, November 3, 2006 12:45 PM

The Financial Times makes Google's quest to halt the legal threat surrounding new property YouTube sound a little more urgent than the companies would have you believe. Google has gone to CBS, Viacom, Time Warner, NBC Universal, News Corp. and others offering tens of millions of dollars in upfront money for the right to broadcast their video content legally on YouTube. With the calm of an airline pilot, CEO Eric Schmidt maintains that "so far people like that message; they are now trying to figure out what to do about it--should they, should they not, under what terms, and those sort of things."

The truth is, Google desperately needs to get these "people" on board, or YouTube will one day be about as valuable as post-litigation Napster. This puts traditional media companies in the position of power in this instance--but they also have things to consider, like YouTube's size and loyal user base. Remember--the promotional and advertising potential of the viral site is attractive to them.

As one media exec says: "The fact is that in three to six months every media company's going to decide that their stuff gets taken down or that they get paid for it." It's like "a big chessboard," he added. Having already bought time (at $50 million in YouTube equity a pop) with several major record companies, Google has now turned its attention to film and TV companies, reportedly offering one $100 million to license content over a two-year period, according to FT.

Read the whole story at Financial Times »