The Wall Street Journal reports that a deal between
Google and CBS collapsed when the companies weren't able to reach an
agreement. If agreed upon, the deal would have created a revenue sharing
partnership between the two companies in which YouTube would legally host clips
from CBS shows including "The Late Show with David Letterman" and
The inability to create a partnership comes as a blow to
Google, which had guaranteed ad revenue in excess of $500 million for CBS. The
deal unraveled because neither company was able to decide on key issues such
as the length of the partnership. Although the companies will still work
together on some projects, they will be at a much more modest level.
Google's relationship with U.S. TV companies has steadily
worsened since its acquisition of YouTube for $1.65 billion in stock. Last year
Google was working on a deal with media giant Viacom Inc., but it never matured
and Viacom instead accused Google of copyright infringement, demanding YouTube
remove around 100,000 clips. Just this week, Viacom announced
that it would be licensing its content to Joost, a new startup company founded
by the same people behind Skype and Kazaa.
NBC isn't very happy with Google either. Last
June the company announced that it would place promotional clips on
YouTube and buy ads, but last week the general counsel of NBC sent Google
a six-page letter telling Google to keep unauthorized content off of YouTube.