“Please be advised that the operations of Bolt, Inc. and Bolt.com have ceased,” states a message on the homepage.  Then – and I’m paraphrasing at this point – it continues, “If we owe you money, or if you want to buy our stuff, contact George E. Shoup, III.”

Mr. Shoup probably started preparing for this attention two weeks ago, when the potential acquisition of Bolt by GoFish fell through.  Or perhaps it was several months earlier, when Bolt promised to pay Universal Music millions of dollars; Universal had filed a copyright infringement suit against the company, and the settlement played a major role in the Bolt-GoFish deal’s failure.

As a result, this final outcome led Read/WriteWeb’s Richard MacManus to comment, “It seems that this is the first major fallout of the YouTube copyright controversies that surfaced once Google acquired YouTube.  While Google has the resources to fight the big media companies, a small company like Bolt.com does not.”

People are already considering the value of the Bolt.com name, though, so there may still be something interesting to find in the site’s ashes.

As Valleywag’s Owen Thomas writes, “The all-stock acquisition was made in February, when GoFish shares were riding near an all-time high.  With GoFish shares now trading at less than a buck . . . the entire company [is] only worth $16 million. With its stock currency devalued, GoFish no longer has the means to pay Bolt’s shareholders, let alone Universal Music, whose lawsuit prompted Bolt to put itself up for sale in the first place.”

Now, that’s not exactly what GoFish said in a press release it issued – the “leading Internet Video Network showcasing original, Made-for-Internet (‘MFI’) programming” instead stated that Bolt failed to “finalize a definitive settlement to the outstanding copyright infringement lawsuit” and did not “settle comparable potential claims.”  But the two versions line up pretty well.

So, where does this leave GoFish and Bolt?  One must assume that they’re on a downhill slide – neither the rumor nor the corporate spin is likely to impress investors.  And although users may not abandon either site due to this behind-the-scenes stuff, the development won’t attract new ones, either.

Credit goes to Paul Resnikoff of Digital Music News for first hearing of the breakup.

When Google acquired YouTube last October, the search company assured investors on both sides that it had a foolproof plan in place to address potential legal liabilities that could stem from copyrighted material that had been uploaded to the popular video-sharing site.

The only problem is that someone forgot to tell all the media companies about this arrangement.

Universal Music Group, in particular, has been especially assertive in pursuing copyright claims against content sites that make use of work from its artists. The settlement with Bolt could provide precedent for its ongoing copyright infringement case against MySpace.

The popular social networking social has since tried to remove any Universal content from its site and says it is working to develop filters to prevent it from being uploaded at all.

"MySpace is dedicated to ensuring that content owners, whether large or small, can both promote and protect their content in our community,” Chris DeWolfe, the chief executive of MySpace, said in a New York Times article.

“For MySpace, video filtering is about protecting artists and the work they create.”

Officials at Universal Music Group, however, believe that MySpace’s effort to protect Universal’s content is too little, too late.

“The copyright law doesn’t give people the right to engage in the massive infringement of our content to build a thriving business and then, after the fact, avoid exposure by saying they will prospectively start to filter,” says Universal spokesman Peter Lofrumento in the piece.

Now I have to wonder if Google has purchased a giant headache for itself with the acquisition of YouTube.

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