• The Hollywood Reporter, Tuesday, October 10, 2006 11:02 AM

The Hollywood Reporter spoke with Steve Chen and Chad Hurley yesterday, immediately following the disclosure that YouTube had been purchased by Google for $1.65 billion in stock. Why did Hurley and Chen finally bow to the takeover interest after maintaining they wanted to build YouTube from the ground up?

"What really helped accelerate discussions was the opportunity to operate independently," Hurley said. "It will allow me and Steve to sharpen our focus for our community and for our partners, [and] to have the resources and experience of Google with us."

This means Hurley and Chen will basically continue to operate the company, while reporting to the bigwigs in Mountain View, Calif. What does the deal mean for content owners? For one thing, they can now feel more aggressive about taking legal action if YouTube fails to grant requests about how their content is used. But they've now got a big parent with deep pockets that can help develop new ideas, like YouTube's so-called "brand channels."

Hurley notes that CBS is adding three specific feeds to its new channel on a daily basis: sports, news and entertainment. He adds that the new deals, announced yesterday with Universal Music Group, Sony BMG and CBS, are just the beginning. "We're going to have more resources to accelerate these discussions. We are a relatively small company now, and we have the opportunity to really move forward with a lot of these partnerships," he said.

Read the whole story at The Hollywood Reporter »