Google won't host CBS content legally, as was originally promised

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 "CSI."

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.

"Can anyone tell me what MobileMe is supposed to do?... So why the f*** doesn't it do that?" -- Steve Jobs
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