There's a deeper reason why the major record companies signed deals rather than litigation letters to YouTube prior to its acquisition by Google: They all made a cut of the $1.65 billion Google paid for the viral video site. Three of the four recording industry majors--Vivendi's Universal Music Group, Sony and Bertelsmann's jointly owned Sony BMG and the Warner Music Group--collectively bagged as much as $50 million as part of a quietly negotiated stake in YouTube prior to the deal's official announcement. Egg on whose face? MySpace. Why? Because MySpace wanted a piece of that action, too, and the …

There is big-time pressure now on Yahoo to make a purchase after Google's assumption of YouTube and poor third-quarter earnings. Its Web audience--Yahoo's core currency--is moving away from its portal service and spending more time on social media sites like MySpace, YouTube, and Facebook. In fact, it blames its weak fourth-quarter outlook on a glut of competing social networking sites. Speculation is rife that Yahoo might still be trying to buy Facebook--as MySpace and YouTube are no longer for sale--but both parties appear to be deadlocked over price. "Facebook is only of value if Yahoo pays the right price," …

Universal Music Group, which just filed a copyright-infringement suit against video-sharing sites Grouper and Bolt, is launching a new Internet service that will give consumers legal access to the record label's catalog of artists. The move may be an assault on YouTube, since UMG just signed a deal last week. Rob Wells, the senior vice president of UMG International, described the subscription-based service, which launches in the UK today, as "a direct-to-consumer broadcast network which is completely under Universal Music's control." Wells might want to note that "control" isn't the future of media, which is precisely why YouTube and …

Mobile ESPN, which died less than a year after its launch, seemed like a good idea. Lease the network of massive telecom companies, go after a lucrative niche market--sports-loving 18-34 males--sell subscriptions and possibly ads, then sit back and bask in incremental revenue glory. Well, it didn't work out for ESPN parent Disney, but that doesn't mean the model is broken--it just means consumers didn't care for the product. But Mobile ESPN isn't the only Mobile Virtual Network Operator (MVNOs license a third-generation mobile network from a major operator, then sell a media-service subscription with branded handsets to …

Together, Google and YouTube present the first viable new-media successor to broadcast and cable television, which has "squandered the ad-supported critical mass they have enjoyed" for decades, says the trade press. There is no going back from a Web-based, on-demand media future, and the Google-YouTube infrastructure will offer the tools needed to manage and monetize that future. The implications are twofold: One, the cost of content creation will fall rapidly; two, the best content from consumers and professional producers alike will rise to the top, lessening the studios' influence over media consumption. YouTube is a brilliant buy for …

A day after Yahoo's highly publicized announcement of a 37 percent drop in net profit, eMarketer has issued a report that says Google, its chief rival, is on track to pocket 25 percent of U.S. online ad spending this year. By year's end, the research aggregator expects the search giant to take in $4 billion of the $16 billion advertisers will spend on the Web. But let's be fair to Yahoo. Google reported revenues of $6.139 billion for 2005, $3.745 billion of which came from its U.S. operations. That means an increase of just $300 million, or about 7 …

Ever get anxious when you arrive somewhere and can't find an Internet connection? Well, you may be an addict, according to new research. Internet addiction has now become a quantifiable problem, affecting one in eight U.S. adults. The study, from Stanford University's School of Medicine, says "problematic Internet use" is prevalent in a sizable portion of the population. Researchers surveyed 2,581 respondents in the spring and summer of 2004, and found that 68.9 percent regularly use the Web, and 13.7 percent said it's hard to stay offline for several days at a time. In addition, 12.4 percent stayed …

Viacom struck an interesting deal with Chinese Web giant Baidu.com Tuesday to provide television and music-video content to the country's rapidly growing Web market. Baidu, the No. 1 Chinese search destination, is one of the Web's most heavily trafficked sites; the alliance marks the biggest effort yet to introduce American TV and entertainment content to China. According to the terms, MTV Networks will provide Baidu with 15,000 hours of original video and licensed music content, much of which will be dubbed in Chinese. The deal comes two months after MTV Networks formed a similar alliance with Google to distribute …

Sony is expected to detail its online service Thursday for the upcoming PS3 at a media event in San Francisco. Unlike Microsoft's, this service is expected to be free, although the PS3 carries a much higher price tag: $400. Microsoft's Xbox 360 has been around for nearly a year. All the while, the video-game arm of the software giant has been touting its Xbox Live Web product, which for $50 a year allows Xbox and Xbox 360 owners to compete with each other over the Web. A free version of Xbox Live is open to all, but it's limited …

Call it online vigilante justice. But if you're an email marketer, make sure you don't end up on the wrong list. The Spamhaus project is a big list of blacklists you don't want to be on if you're hawking your own or a client's products via email. Run and maintained by a group of anonymous volunteers, the Spamhaus Project aims to identify spam and help Internet service providers and businesses filter out the Web's worst spam perpetrators. However, E360insight.com--a small marketer that claims its practices are legitimate--wants to have Spamhaus' URL suspended until it complies with a September ruling …