Viacom-Google Unsealed: McGrath: ‘This Could Be Our MySpace’


Another batch of filings and unsealed documents today in the Viacom (NYSE: VIA) lawsuit against Google/YouTube and another rollicking trip down memory lane. One favorite: a batch of memos between MTV Networks head Judy McGrath and former execs Michael Wolf and Blair Harrison in July 2006 about buying the hot video portal.

McGrath to Wolf: “I think this could be our MySpace (NYSE: NWS). Only bigger and better because it’s video…” Harrison, described by McGrath as having “trashed” YouTube before, tells her after being asked whether MTVN should buy it: “Today… I think we should put a squad of four people in a room for a day, and figure out if we can make a business out of it. Assuming we can, we should go and buy it.” His only doubt? “Whether it can navigate the waters of monetizing its stuff vs. the illegality of that stuff and do it quickly enough to prevail.” (His full memo below.)

The internal acquisition talks were the subject of a number of these exhibits. Following that exchange, intense discussions started about whether or not a business model could be found for YouTube within MTVN — including a PowerPoint deck released in March. In an e-mail exchange a couple of weeks later, Robert Bakish told Jason Witt: “We haven’t given up but I give it less than one tenth of a percent chance. Wade will have the conversation but it seems unlikely to yield anything. Apparently sequoia thinks they have another Google (NSDQ: GOOG) on their hands and they want to ride it. Or so I’m told.” Witt replies: “they are right. it’s THE VIRTUAL MSO.” Bakish: ‘In a weird way, it might be more than that.”

Another fave has nothing to do Viacom: an August 2007 dialogue at Google following a query from Warner Music about how why their official videos come up below other versions in You Tube search results and how they can improve that. Shashi Seth, then head of monetization for YouTube/Google, explains that the “onebox” can single out material without changing the search results: “We should never be in the business of changing our search algorithms to favor content based on who the owner is. In search the same requests come to us from NY Times and Wall Street Joumal – who claim that their content should always be placed higher than anybody else.”

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