Google last week announced that it had bought the video sharing service Youtube for $1.64bn. This has surprised many for a number of reasons:
- firstly Youtube, whilst having a large number of users fails to generate any sizable income.
- Google had been developing Google Video, a similar service
- Myspace, another large community site sold for only $580m
There is a thought that Google could harness the large user base at Youtube to generate a large revenue but this is where the problems start. The big draw to the site is the searchable copyrighted clips, the copyright owners in the past have not looked to claim against Youtube as they have no money, the best result that could be achieved would be the closure of the site.
With Google's large pockets funding the company there are reports of major companies looking to claim copyright infringment and the big payoff that would result.
The question now is how does Google respond, hold out and fight the legal battle? remove the copyrighted material and strip its user base? or attempt to deal when they appear to be backed into a corner?
The creaters of Youtube must be laughing all the way to the bank...
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