In a clash that highlights the different approaches of 'new' and 'old' media, Viacom demanded Google remove more than 100,000 Viacom-produced clips from its YouTube video site. Without a formal agreement in place, Google had no choice but to comply. Viacom management claims the roughly 100,000 clips it ordered removed have provided YouTube users with roughly 1.2 billion video streams. While Google claims it will use software in the future to weed out unauthorized video clips, Viacom claims no such software is as of yet in place. The two sides had met several times but failed to reach an agreement. Said Viacom CEO Philippe Dauman, "We have been quite indulgent to this point... we cannot continue to allow YouTube or Google to continue to profit from our content without a reasonable commercial agreement." Google management counters that Viacom is acting in a short-sighted manner: "They are more focused on the money they can make in the short term... we're still more focused on innovation than the short-term economics." Google still hopes to reach a licensing agreement with Viacom; there are some industry observers who believe Viacom's latest move is merely a ploy to sweeten its bargaining position.
• Sources: YouTube.com, Wall Street Journal, Bloomberg, MSN/Financial Times
• Commentary: Viacom Plays Hardball With Google on YouTube; YouTube Capitulates, Media Giants to Form YouTube Rival
• Stocks and ETFs to watch: Viacom (VIA), Google (GOOG). ETFs: First Trust Dow Jones Internet Index (FDN)
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