GooTube Talking To News Corp

    October 12, 2006

Google’s controversial acquisition of online video repository YouTube as rankled some feathers, which is not too surprising really. Whenever a business move of this magnitude is made, not all of the reactions will be of the “happy, happy, joy, joy” variety.

Case in point, when the Google/YouTube news avalanche subsided to make room for the reactions phase, one of the first signs of negativity came from social networking phenomenon MySpace when it was reported parent company News Corp wanted all YouTube video links removed. Reasons for the desired removal can only be speculated upon, however, some reports chalked it up to good ole jealousy. While this may indeed be the case, the fact that Google and MySpace are advertising partners and News Corp considers YouTube a heavy competition probably had as much to with the initial reaction as anything else.

In order to salve these potential wounds, the top Google brass, led by CEO Eric Schmidt, is heading to Los Angeles to meet with New Corp headman Rupert Murdoch. The Guardian Unlimited speculates the two groups will discuss expanding the MySpace/Google advertising deal past the $900 million initially agreed upon.

Another area of dispute is the amount of traffic MySpace sends to YouTube, although I don’t think the presence of Eric Schmidt and Rupert Murdoch would be necessary to eliminate such a disagreement. No, usually when you send in the big guns like this, money is the main issue being hashed out and if News Corp was to block YouTube links, then Google would be losing an opportunity to expose the MySpace audience to their advertising.