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You Tube 'knew' of Viacom breech

October 7, 2009

According to reports in the US internal YouTube e-mails, handed over in the preliminary discovery phase of the pending court action brought by Viacom, indicate that YouTube managers were aware of unauthorized content on the site and chose not to remove it. If true this would harm You Tube's defence that it cannot be responsible for copyright breech it doesn't know about so long as it takes it down when informed as per the 1998 Digital Millennium Copyright Act .

Depositions in the case have also showed Google decided to pay $1bn more than it thought it was worth. Talking about the 2006 deal Google CEO Eric Schmidt says that while he believed that YouTube was actually worth between $600 and $700 million, he nevertheless recommended that the board buy the privately-held company for $1.65 billion: "They had indicated to us that they would be sold, and we believed that there would be a competing offer," he says. "In the deal dynamics, the price, remember, is not set by my judgment or by financial model or discounted cash flow. It's set by what people are willing to pay. And we ultimately concluded that $1.65 billion included a premium for moving quickly and making sure that we could participate in the user success in YouTube."

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