So Viacom is suing Google. This isn't as big a deal as the media would have you believe, says Henry Blodgett, Merrill Lynch's infamous Internet analyst during the dot com bubble. Why?
Because once Google starts fighting the lawsuit, the companies will be in court for years, during which time, Viacom's TV content will become less relevant as YouTube's platform grows in reach and
influence. Further, the $1 billion figure is absurd for several reasons. Viacom wanted headlines, and it got headlines, but $1 billion is "chump change in this league." The injunction is much more
damaging, although all this would likely do is force YouTube to develop a better way to weed out copyrighted content--something the Web giant was going to have to do sooner or later anyway. All in
all, Blodgett calls the Viacom suit "just another negotiating move" that will disappear once it's all settled.
YouTube is no Napster--an injunction would not shut the video site down. For
one thing, Google has a million times better resources for defending itself in court; for another, the video distributor already has several legitimate distribution deals in place with other media
firms. Finally, Viacom wants more money for its content--it's happy to have millions view its stuff on YouTube. Proper compensation is more a function of Google not yet figuring out the YouTube
compensation model than anything else.
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