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Tuesday, November 07, 2006

Google CEO Eric Schmidt on the YouTube purchase and online video

From the Web 2.0 Conference in San Francisco: John Battelle opens his on-stage interview with Google CEO Eric Schmidt by asking him about the YouTube acquisition. Why’d you do it? Battelle asks.

Schmidt says he started to notice traffic spiking on Google Video this year – more people posting video, and more people watching it. YouTube, he said, was growing even faster than Google Video. “Something happened this year where all of a sudden, video became a fundamental data type on the Internet, and we wanted to be part of that,” says Schmidt, who is an engineer by training.

Schmidt reiterated Google’s intention to let YouTube continue to operate as a separate property. “They’re very much focused on the community and social networking aspects of video, and they have some special and unique ideas about how to address that,” he said.

Schmidt said Google hadn’t set aside a large sum of money to “buy peace with the media companies,” as Battelle put it (the question seemed to be inspired by these rumors. But Schmidt that he was trying to figure out how Google and YouTube could work with major content owners for mutual benefit.

“We’ve visited with as many of the media companies as we can,” Schmidt said, “because we have to respect copyright.”

“The explosion of video gives us the opportunity, if we can construct the right partnerships, to get licensed content into the right places, [which] could result in a larger number of viewers.

“YouTube had been on this path, and we’d been on this path,” he said. “Together, we’ll move more quickly.”

But the he said that the process of working with content owners on rights and revenue deals wasn’t a walk in the park. Media companies have “sophisticated rights management systems” and “complicated rights structures.” Determining the right way to monetize content can be hard, especially when media companies have “other customers whose rights they have to respect,” too.

That was about all he said about video and YouTube, although he did make a broader comment later in the session that sounded, to me, like it could apply to studios and networks, which can still be reluctant to make much of their content available online. (Disney told me this week that they have all of 100 movies available for digital purchase today.)

“It’s a mistake to bet against the Internet. Don’t bet against the Internet,” Schmidt said. “As the Internet has rolled into industries, it has upset things – especially with businesses that withhold information…the Internet is fundamentally about sharing.”


During the Q&A period, someone in the audience asked whether Schmidt thought that someone else might be able to build a YouTube-sized business without relying on copyright-infringing content. Schmidt said he didn't agree with the premise of the question, but that "the answer is yes." Someone could emerge who created a better user experience, better performance, better cross-linking.


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