• by Wayne Friedman , March 14, 2007

Viacom Inc. just went ballistic. It took its dispute with Google's YouTube up a big notch--seeking $1 billion in damages for the video site's airing of an estimated 160,000 unauthorized Viacom videos.

Several weeks ago, Viacom asked YouTube to remove those videos, which YouTube agreed to do. Those clips include content from its MTV Networks, Comedy Central, VH1 and Nickelodeon. Viacom said its clips have been seen some 1.5 billion times.

In its complaint, Viacom said YouTube's business model "is based on building traffic and selling advertising off of unlicensed content, is clearly illegal and is in obvious conflict with copyright laws."

Other media companies have battled with YouTube, but none have taken their woes to court. Given the size and popularity of YouTube, media companies have tried to work with the big Internet video site. For example, CBS Corp. and NBC Universal have struck deals.

Universal Music Group had threatened to sue YouTube because of its illegal use of music videos. But later, the two companies reached a deal.

Viacom, perhaps more than any other major media company, is more apprehensive of YouTube as a competitor. MTV Networks has been a hub for young consumers for decades. Now, with growing Internet usage, teens and young adults have gravitated to major video sites such as YouTube, as well as social-networking sites, like MySpace and Facebook--effectively eroding MTV's street cred.

Viacom attempted to make a licensing deal with YouTube some months previously. But those talks ended with Viacom demanding YouTube pull off its videos.