Good news, Godfather fans — Google has just recently announced on their official YouTube blog that they’ve inked a licensing deal with Viacom-owned Paramount to bring some 500 new titles to YouTube and the Google Play store over the coming weeks.

Google first started toying with the notion of movie rentals via YouTube in early 2010, and their rental catalog has since swelled to nearly 9,000 titles. Bringing movie rentals to the Android ecosystem took a little bit more time, with the feature launching in the Android Market in May 2011. With Paramount now in tow, Google has licensing agreements with five of the six major motion picture studios, with Fox being the only big player still sitting on the sidelines.

While welcome, the news comes as a bit of surprise for a few reasons. Paramount, for example, isn’t exactly a stranger to the digital distribution game — they officially pulled back the curtains on ParamountMovies.com earlier this year, which allows users to rent or purchase a number of films from their catalog.

More notable though is the contentious history between the search giant and Viacom, Paramount’s parent company. Viacom, in case you had forgotten, filed suit against Google nearly five years ago over claims of copyright infringement because users were uploading their content without permission. The case was eventually dismissed in 2010, but that wasn’t good enough for Viacom — they sought to revive the suit just last year, with one of their lawyers mentioning that the initial decision would “lead to the vast exploitation of material on the Internet.”

Exclusive - Xfire, which operates a social service used by 19 million gamers, has raised $4 million in fresh funding from Intel Capital and unnamed angel investors.

As a result of the capital injection, Xfire is severing the ties with Titan Gaming, the company that acquired them from Viacom a little over a year ago.

Both Xfire and Titan will henceforth operate independently from one another.

In addition to the spin-off and funding news, Xfire has also announced a trio of new execs joining its leadership team; Titan Gaming co-founder Mark Donovan will serve as President, Juston Brommel as CMO and Autumn Radtke as Director of Business Development.

Xfire provides a social communication platform targeted specifically at gamers, with features like group text and voice chats and user-generated content sharing tools such as screenshots, videos and live game broadcasts.

Newly appointed Xfire President Mark Donovan pitches the service as a sort of “Facebook meets Skype for gamers”. Very meta!

Either way, the company says it supports a lively ecosystem that currently comprises ‘hundreds of game publisher partners’ and more than 19 million end users.

Intel Capital joins the following early-stage investors in backing Xfire: Tomorrow Ventures, Clearstone Venture Partners principals William Quigley and Jim Armstrong, PriceGrabber co-founder Kamran Pourzanjani, and MP3.com founder Michael Robertson.

Donovan tells me Xfire originally received up to a Series C financing round since its founding, followed by an investment of ‘several millions of dollars’ by Viacom during the latter’s ownership of the company. He estimates that roughly $44 million has been injected into the company to date.

The deal also includes other TV Shows from Viacom’s media networks, including Comedy Central, MTV, BET, VH1, Spike TV, and TV Land to the Hulu Plus subscription service. Viacom had previously pulled the two Comedy Central shows from Hulu last March. Financial terms of the new agreement were not disclosed.

From the release: Under the agreement, current full episodes and clips of “The Daily Show with Jon Stewart” and “The Colbert Report” will be available on the free ad-supported Hulu.com service and through the Hulu Plus subscription service beginning February 2, 2011. In addition, Viacom will make available to Hulu Plus subscribers a selection of current programs, like Jersey Shore, Tosh.0, Teen Mom 2, Manswers, Let’s Stay Together, and Hot in Cleveland 21 days after they air. Viacom content availability on Hulu Plus will vary on a show-by-show basis.

This is a big deal for Hulu. Even when Hulu first convinced Viacom to distribute Colbert and The Daily Show back in June 2008, it was a major milestone for the then young video service. Viacom subsequently pulled the content, deciding that they needed Colbert and Jon Stewart more than they needed Hulu, especially since Vicacom wasn’t really monetizing the content on Hulu.

But with Hulu’s subscription plans and massive advertising, Viacom sees the potential for pulling in revenue now that Hulu is pulling in hundreds of millions in revenue. Hulu’s subscriber count is expected to pass 1 million this year and Hulu Plus as a business will have a revenue run rate north of $200 million this year. And Hulu now has 30 million monthly users, traffic which Viacom simply cannot ignore. Clearly, there must be some sort of revenue share but neither company is revealing the terms.

Of course, Viacom has not brought CBS’ content to Hulu. Yet. Perhaps the media giant is testing the waters before bringing all of its television content to the platform

But with Viacom putting its content back into Hulu, this shows that big media companies have confidence in the platform once again. And this is surely going to help Hulu’s planned IPO in 2011.

For Hulu CEO Jason Kilar’s take on the new partnership, check out his post on here.

Xfire, the social network for gamers that was acquired by Viacom for $102 million back in 2006, has a new owner. The buyer is Titan Gaming, a small company that raised a mere $1 million in angel funding to date, so we’re making an educated guess here and going to assume that it was sold for a song compared to the price Viacom paid a couple of years ago.

In a message posted on the Xfire website very recently (via Kotaku), it looks like most of the development team is not sticking around:

August 2, 2010–Xfire has been purchased by another company. Most of the team that has brought you Xfire for the last 6 years is leaving, including me. We’ve enjoyed our time and I personally am sad that I was only able to do 127 releases. Good bye and game on!

The message comes from someone named ‘Chris’ – most probably Chris Kirmse, Xfire founder and VP of Engineering. Krimse was once Senior Engineer of Yahoo Games – said to have built the Yahoo FIFA system – before creating Xfire back in 2003.

Xfire is a free service that enables gamers to interact with each other coupled with a tool that automatically keeps track of when and where gamers are playing PC games online. It works regardless of game type, server browser, or gaming service.

The service thus eliminates the need to run multiple programs like IRC, instant messengers, or in-game friends lists to keep track of when and where a gamer’s friends are playing. It combines instant messaging, a server browser, peer-to-peer file downloads, in-game messaging, screenshot and video capture and an active gaming community.

The service has attracted some 16 million users to date.

We’ve just confirmed with Titan Gaming CEO John Maffei that they have acquired Xfire – the deal was signed just a couple of hours ago – but have not been able to pin down the exact purchase price. Here’s a brief statement from Titan:

Titan Gaming has purchased Xfire. The terms of the purchase are undisclosed. Titan will be taking on the Xfire name. The Xfire services will continue uninterrupted for its users. Xfire redefined how gamers communicate, Titan intends to build upon this tradition and utilize the Xfire platform to help gaming companies better engage and monetize their games.

Maffei adds that Titan Gaming has retained several key members of the development staff, which sounds far more positive than the statement on Xfire’s website – which reads that most of the team is leaving the company – suggests.

Titan Gaming last May announced that it had raised $1 million in funding from a slew of prominent angel investors.

You can find the full list of investors on the startup’s CrunchBase profile, but it includes people like Clearstone Venture Partners principals William Quigley and Jim Armstrong, PriceGrabber co-founder Kamran Pourzanjani and MP3.com founder Michael Robertson.

How much did Google spend to fend off Viacom’s $1 billion copyright lawsuit? On today’s earnings call, CFO Patrick Pichette revealed that Google’s legal bills for the case amounted to $100 million, and that was before it went to trial.

The legal bill could have ended up being many times that amount, but last month the judge threw out the case, and Google declared victory. Viacom will reportedly try to appeal, but the summary judgement was pretty harsh. As I wrote at the time:

The fact that the judge granted YouTube’s summary motion to dismiss the case sends a clear message to media companies: Live by the DMCA, Die by the DMCA. The “safe harbor” provision in that Act is what protects YouTube and other Websites from being sued for the copyright infringement of their users as long as they take down infringing material. The judge found that while there were a huge number of infringing videos on YouTube, the site did take them down when notified. In fact, he points out one instance in 2007 when Viacom gave YouTube a single takedown notices for 100,000 videos. By the next day they were down.

Unless Viacom can find a judge who interprets the DMCA more liberally, this lawsuit is going nowhere. YouTube is here to stay, as long as Google has billions of dollars of cash in its war chest.

If Google spent $100 million on lawyers, I wonder how much Viacom spent.

The long-standing, $1 billion copyright infringement case against YouTube by Viacom is now pretty much over. The judge incredibly threw out the case in a summary judgement (his final order is embedded below) and YouTube has declared victory. Viacom first filed its lawsuit in 2007. And plenty of juicy tidbits have come out over the years from unsealed documents. An appeal is pretty much certain, but the fact that Viacom could not even get to trial sets a bad precedent.

From YouTube’s blog post:

Today, the court granted our motion for summary judgment in Viacom’s lawsuit with YouTube. This means that the court has decided that YouTube is protected by the safe harbor of the Digital Millenium Copyright Act (DMCA) against claims of copyright infringement. The decision follows established judicial consensus that online services like YouTube are protected when they work cooperatively with copyright holders to help them manage their rights online.

The fact that the judge granted YouTube’s summary motion to dismiss the case sends a clear message to media companies: Live by the DMCA, Die by the DMCA. The “safe harbor” provision in that Act is what protects YouTube and other Websites from being sued for the copyright infringement of their users as long as they take down infringing material. The judge found that while there were a huge number of infringing videos on YouTube, the site did take them down when notified. In fact, he points out one instance in 2007 when Viacom gave YouTube a single takedown notices for 100,000 videos. By the next day they were down.

Unless Viacom can find a judge who interprets the DMCA more liberally, this lawsuit is going nowhere. YouTube is here to stay, as long as Google has billions of dollars of cash in its war chest. You’ve got to wonder whether Viacom could have made more money putting ads on all of those infringing videos by now than they’ve spent on legal fees.

In a July 29,2005 email about competing video websites, YouTube co-founder Steve Chen wrote to YouTube co-founders Chad Hurley and Jawed Karim, “steal it!”, and Chad Hurley responded: “hmm, steal the movies?”

Steve Chen replìed: “we have to keep in mind that we need to attract traffic. how much traffic will we get from personal videos? remember, the only reason why our traffic surged was due to a video of this type. . . . viral videos will tend to be THOSE type of videos.”

The quote seems to be referring to full-length movies, though viral videos are mentioned (it’s unclear in this context whether they’re saying movies will go viral, or if they’re talking about traditionally more viral video clips). As it turns out, it’s the latter. And they were probably joking about it. Here’s the actual Email thread, in chronological order:

SUBJECT: Re:http://www.filecabi.net/

Jul 29, 2005  1:05 AM, Steve Chen wrote:

steal it!

Jul 29, 2005 1 :25 AM, Chad Hurley wrote:

hmm, steal the movies?

Jul 29, 2005 1 :33 AM, Steve Chen wrote:

haha ya.

or something.

just something to watch out for. check out their alexa ranking.
-s

Jul 29, 2005 7:45 AM, Chad Hurley wrote:

hmm, i know they are getting a lot of traffic… but it’s because they are a stupidvideos.com-type of site. they might make enough money to pay hosing bills, but sites like this and big-boys.com will never go public. I would really like to build something more valuable and more useful. actually build something that people will talk about and changes the way people use video on the internet.

Jul 29 2005 6:51 AM, Steve Chen wrote:

right, i understand those goals but, at the same time, we have to keep in mind that we need to attract traffic. how much traffic will we get from the personal videos? remember, the only reason why our traffic surged was due to a video of this type.
i’m not really disagreeing with you but i also think we shouldn’t be so high & mighty and think we’re better than these guys. viral videos will tend to be THOSE type of videos.
-s

Jul 29 2005 6:56 AM, Steve Chen Wrote:

another thing. still a fundamental difference between us and most of those other sites. we do have a community and it’s ALL user generated content.

-s

It’s worth pointing out that the subject of the Email thread was ‘http://www.filecabi.net’, and that big-boys.com is now Break.com — it’s pretty clear that Chen and Hurley are referring to the brief, dumb sort of videos that often go viral as opposed to full length movies. And, based on the ‘haha’ comment (which is ommitted from Viacom’s document), Chen and Hurley may have just been joking about stealing any content at all.

This doesn’t clear YouTube by any means (there are still plenty of other suspect quotes).  But it casts some doubt on the rest of Viacom’s ‘undisputed facts’.

Earlier today, several previously sealed legal documents in the longstanding copyright infringement lawsuit against YouTube by Viacom were made public. In conjunction with the public release of those documents, YouTube’s chief counsel Zahavah Levine wrote a blog post which reads more like a summary of a legal brief.

In it, Levine outlines YouTube’s main defense against Viacom’s allegations, including the fact that Viacom “secretly uploaded its content to YouTube, even while publicly complaining about its presence there.” Levine also notes that “Viacom tried repeatedly to buy YouTube,” suggesting that the current $1 billion lawsuit is its attempt to cash in on YouTube years after the fact.

Here is the key passage from the blog post:

For years, Viacom continuously and secretly uploaded its content to YouTube, even while publicly complaining about its presence there. It hired no fewer than 18 different marketing agencies to upload its content to the site. It deliberately “roughed up” the videos to make them look stolen or leaked. It opened YouTube accounts using phony email addresses. It even sent employees to Kinko’s to upload clips from computers that couldn’t be traced to Viacom. And in an effort to promote its own shows, as a matter of company policy Viacom routinely left up clips from shows that had been uploaded to YouTube by ordinary users. Executives as high up as the president of Comedy Central and the head of MTV Networks felt “very strongly” that clips from shows like The Daily Show and The Colbert Report should remain on YouTube.

Viacom’s efforts to disguise its promotional use of YouTube worked so well that even its own employees could not keep track of everything it was posting or leaving up on the site. As a result, on countless occasions Viacom demanded the removal of clips that it had uploaded to YouTube, only to return later to sheepishly ask for their reinstatement. In fact, some of the very clips that Viacom is suing us over were actually uploaded by Viacom itself.

In other words, while Viacom’s lawyers were issuing takedown notices, its marketers were putting clips up on YouTube to promote Viacom movies and TV shows. You’ve got to wonder what the judge will make of that evidence.

Dan Lyons, the Newsweek writer, book author and creator of the Fake Steve Jobs persona, is currently writing a pilot script for a comedy series on Silicon Valley for entertainment channel and movie streaming network EPIX.

Larry Charles of Seinfeld, Entourage, Curb Your Enthusiasm, Borat and Brüno fame will be directing the pilot and overseeing the script development. The show is going to be called “iCON” and will be a half-hour, single-camera style satire.

EPIX, a service from Viacom, its Paramount Pictures unit Metro-Goldwyn-Mayer Studios and Lionsgate, is working with Media Rights Capital to develop the series, which it promises it will “pull out all stops” for and aims it to be a “riotous satire of Silicon Valley and its most powerful figures”. Notably, EPIX recently landed its fourth major cable deal by signing up Charter Communications, after sealing deals with Cox, Mediacon and Verizon FIOS.

Deadline has more on what the series will be about:

The show’s lead charcter (SIC), Tom Rhodes, is a composite of that Silicon Valley titan, and the comedy is described as a savage satire, a study of ego, power and greed.

And:

MRC will serve as the studio and financier. The company said it had several bidders for the property, but chose EPIX because Charles could be as edgy as he wanted to be. The feeling is that the show could put EPIX on the map the way series like Mad Men did for AMC, Weeds for Showtime, and Burn Notice for USA. Charles, who worked with MRC on the Baron Cohen films, will be swinging for the fences.

We. Cannot. Wait.

When Hulu first launched, it was supposed to be the media industry’s answer to YouTube: a place where shows and movies from TV would find an audience online and make advertising money directly for the media companies backing it instead of sharing any of that video ad money with YouTube. All that professional quality video from NBC, Fox, and Comedy Central brought in a huge audience, helping Hulu grow into the second largest video site online with more than 1 billion video views a month.

Well, that formula is great for Hulu, but it isn’t working for one of its biggest media partners. Yesterday, Viacom decided to pull two of the top shows from Hulu: Comedy Central’s The Colbert Report and The Daily Show With Jon Stewart. Both were regularly among the most popular shows on Hulu, which is a joint venture between NBC Universal and News Corp. When Hulu first convinced Viacom to allow it to distribute Colbert and The Daily Show back in June, 2008, it was seen as a major milestone for the young video service.

Just like on TV, the majority of video viewership on the Web is driven by hits. The Comedy Central shows were big hits for Hulu, as evidenced by Hulu’s blog post practically begging Viacom not to leave. But Viacom decided that Hulu needed Colbert and Jon Stewart more than they needed Hulu. Clips from the shows will still be availble for free online on TheDailyShow.com and ColbertNation, where Viacom controls and sells all the video ad inventory through its own sales force.

The Comedy Central shows are not going behind some sort of Murdochian paywall. They are still embeddable and shareable across the Web, but with Comedy Central’s garish video player and its ads. When you have hit shows, people will find them even if they are not on Hulu or YouTube. Viacom made the calculation that it can make more money by recentralizing distribution of its hit shows on its own sites than allowing them to be streamed on Hulu. Why should they split video ad revenues with Hulu when they can have it all themselves. As Andrew Barron in an insightful post

In other words, whatever they get for ad sales over there at Hulu is going to be split up between Hulu and Comedy Central. Why should Comedy Central cut in Hulu on their ad money? They can sell their own ads for a premium and make 100% of the share if they do it themselves. Some shows may be glad to give Hulu 50% or even more of the rev share because Hulu brings an audience they dont already have. But eventually, for any top show, the leverage tide will turn and the middle person will be the first to go.

Hulu is good for shows that can’t attract a big enough audience to their own sites, but there is too much money left on the table by splitting ad revenues for the hits. If this trend continues, with media partners pulling their best content from Hulu once it becomes self-sustaining, that could turn into a long-term problem for Hulu. It’s also bad for consumers, who don’t want to have all of their videos in one or two places rather than have to jump from ColbertNation to TheDailyShow.com to HBO.com to CBS.com and so on.

The economic incentive is too great for media properties to centralize their videos on their own sites. But to consumers, this recentralization looks more like fragmentation and opens up the opportunity for someone else (Steve Jobs, Brian Roberts?) to once again bring it all together in one place. It is clear that consumers don’t want to hunt across the Web for all their shows, but the economics of video advertising are dictating otherwise.

The streaming selections from Nickelodeon feature critically acclaimed shows that have helped make it the number-one cable network for more than 14 years. The shows include “Blues Clues” (Seasons 1 and 2), “Dora the Explorer” (Seasons 1 and 2), “iCarly” (Seasons 1 and 2), “True Jackson, VP” (Season 1) and “SpongeBob SquarePants” (Season 3). In total, more than 300 episodes of these and other favorites from Nickelodeon television networks, including The N’s “Degrassi,” are also now available to be instantly streamed from Netflix.

Big Media’s love affair with the Internet ebbs and flows with the markets. When they see money pouring into Web startups, they feel threatened and rush to do the same. They ramp up their digital divisions, which usually are no more than venture arms, and hope to strike it rich. When the markets are down, as they are now, their attention drifts elsewhere—exactly at the time when they can pick up innovation on the cheap.

“M&A is gone,” the digital media chief at one of the largest media companies tells me. Other than a few targeted acquisitions to fill out business or technology holes, “you look foolish making any purchases,” he says, “especially if prices are still going down.”

And those prices are way down. Consider, for example, that CBS’s entire market capitalization is now only $2.5 billion, which is not much more than the $2.1 billion its digital division CBS Interactive paid in cash over the past two years for Cnet ($1.8 billion) and Last.fm ($280 million). (It also made a number of other smaller acquisitions and investments). As of December 31, 2008, CBS only had $419 million in cash on its balance sheet.

When it bought Cnet last May, CBS’s market cap was $16.5 billion. If CBS had instead paid in stock for CNET, that stock would be worth only $273 million today—less than what CBS paid for Last.fm two years ago.

But the media company that went on the biggest buying spree was News Corp. Its digital division, Fox Interactive Media, was lucky enough to pick up MySpace, which paid for the rest of its acquisitions. Now that FIM doesn’t seem to be buying much anymore, it is not clear why it exists. Most of its properties could be integrated into other News Corp divisions or sold off. It does have some ad targeting technology and a budding ad network which is seeing some success, but that could be a stand-alone business or combined with MySpace.

And that is kind of the whole point. It is not clear why media companies even need separate digital divisions anymore. Even the digital media chief I spoke with thinks that “it is silly to have a separate division.” Disney, Viacom, NBC, and News Corp. each have digital revenues that are close to or are approaching $1 billion. But that revenue is typically spread across many different businesses. And, as big as it is, the digital side of the media business is still overshadowed by the many billions of dollars more brought in by the traditional side of the business—TV, movies, radio, even print.

The executives leading those businesses have too many other fundamental problems to deal with to worry too much about having a Facebook strategy or how to market their movies through Twitter. The last time the big media companies pulled back from the Web, it was because the Internet sector led the downturn. And every Web-related business became toxic. Now, it is more that the general economic crash is hurting overall revenues across the entire media landscape.

Media executives are going into self-preservation mode. They know that all media businesses are going digital, eventually. But right now, they are more concerned with sheltering their core business than with pushing forward a digital business that will leech attention and profits from the core business.

So the digital divisions have to transition from M&A mode to business-building mode. But without money or attention, the most talented executives in those divisions may not stick around for long. Mika Salmi, who sold Atom Entertainment to Viacom and then became the president of Global Digital Media at MTV Network, is already headed out the door. NBC lost its digital chief last November. And digital media executives with M&A backgrounds like Quincy Smith at CBS don’t have a lot of money to spend these days.

That leaves building the digital part of the media business to the old-school executives in charge of the other businesses. How many of them get it?

(Photo by atomicjeep).

Time Warner subscribers almost, almost lost some of the best cable networks if a deal hadn’t been struck by the time the NYE ball dropped. Thankfully, Viacom and Time Warner came together in the name of the subscribers (and money) and penned an agreement in principle that will keep Dora and Stewart on the air. 

The whole dispute came about as Viacom claims that their key stations – MTV, Comedy Central, VH1, SpikeTV, Nickelodeon, and Noggin – account for 20% of the providers viewing but Viacom isn’t compensated as such. So, long story short, the network wanted 23 cents more per subscriber to keep the stations on their air which works out to be between $35 to $40 million more a year in Viacom’s coffers. 

Thankfully an unannounced deal was made as I can’t imagine recovering from a hangover without MadTV.

MTV Networks has acquired the remaining portion of Social Project that it did not already own. Terms were not disclosed. Previously, MTV Networks was a minority investor in Social Project, which is behind the Flux social-networking platform powering many of its sites, including MTV.com, TheDailyShow.com, and ColbertNation.com. Social Project, which competes with Ning and KickApps, had previously raised $47.5 million, mostly from MTV’s parent company Viacom.

Social Project started life as Tagworld, before partnering with Viacom to add social media features to its sites. Last November, Flux was launched as a joint venture to let people create their own niche social networks and tap into Viacom’s vast library of video content. Since then, Flux has added about 2 million members, bringing the total to 7.6 million across about 1,000 different sites. The biggest one is MTV.com, with 600,000 registered members. Of those, 250,000 40,000 signed up on one day alone, the day of the MTV Video Music Awards on September 7. (You have to be registered to leave a rating or comment.). And, according to MTV Networks, engagement levels across all of MTV.com (as measured by time spent on the site and pageviews) are up 20 percent, and up 140 percent among Flux members.

Compared to other social networking platforms, Flux still powers a relatively small number of sites. For instance, there are 475,000 individual Ning social networks, compared to 1,000 for Flux. But the number of people each one reaches may not be so far apart. Although Ning does not break out its total number of registered members, comScore measures 6.9 million monthly unique visitors worldwide. That is not an apples-to-apples comparison to Flux’s 7.6 million registered users. Monthly visitors and registered users are two different things and, unfortunately, comScore does not do a good job measuring Flux. (For a point-by-point comparison of Flux and Ning, see Last year, Ning CEO Gina Bianchini analysis that we published last year on TechCrunch).

Flux, for its part, is trying to position itself more as a platform for sharing social media in than a social network per se. For instance, if I am a Flux member on MTV.com and then I join your Flux social network, I can automatically bring my entire collection of videos and other content that I’ve already organized on MTV.com with me. I’m not sure how much people will want to organize their social lives around Viacom content, but this acquisition does give the media company a way to add social networking features to all of its sites without relying on a someone else’s technology, whether that be Ning, Facebook, or MySpace.

It is not enough to be a destination site anymore. Everyone now wants to become an ad network. MTV Networks on Monday announced that it has expanded its vertical ad network strategy by building ad networks around the service’s core properties.

Each vertical ad network will be called a “Tribe.” Much like In contrast to what LinkedIn is trying to do with its new ad network (reselling access to its audience no matter where they may roam on the Web), MTV.com is basically reselling access to its advertisers audience. It is striking deals with other sites that share a similar audience (i.e., speak to the same Tribe) and offering its existing advertisers inventory on those hand-selected sites.

Each Tribe is made up of the partner sites and the people who visit them.  In this case, the “MTV Generation Tribe” is supposedly made up of sites targeting that hard-to-reach youth demographic that is interested in music, movies, videogames, sports, and sneakers. According to MTV Networks, each of its online properties has users that are staggeringly similar and can form the basis of an advertising Tribe. (Yeah, we thought tribes were made up of people, but MTV thinks that Websites can be grouped into tribes as well. Who knew?)

Once the Tribe is formed, MTV will sell advertising inventory and packages using demo-targeting, geo-targeting, day-parting and contextual targeting that it believes will capture the right audience for the right advertiser.

The MTV Tribe ad-network, which is anchored by MTV.com, launched today with Pepsi as its hallmark sponsor. CMT, Spike, and VH1 Tribes will be launching later this month and the Comedy Central Tribe will launch during the first quarter of 2009.

MTV Networks’ decision to categorize each service into Tribes is following a trend across the Web. In essence, companies are taking a destination site’s targeted audience and repackaging it into an ad network in the hopes that it will garner more revenue for all parties.  The strategy assumes that advertisers will want to spend money targeting that specific audience based on their shared interests.

This will only work for destination sites that attract enough unique visitors that have enough overlap with other Websites to make them want to sign up as advertising partners.  (MTV had 9.4 million U.S. visitors in August, according to comScore).  That is why both MTV Networks and LinkedIn are only signing up partners on a case-by-case basis.

Does every niche destination site need to become its own ad network, though?  Ultimately, it would make more sense for an existing ad network to offer a way to target all of these different communities of interest.  But then the ROI on the ads would have to more than make up for the fact that the money would be split at least three ways. (In MTV’s case, since it has its own ad sales force, the money is only split two ways).

Silicon Alley Insider is reporting that Comcast has bought newsletter service DailyCandy for an unconfirmed $125 million. The site caters to women interested in fashion, food, travel and other cosmopolitan topics.

Comcast apparently beat out Viacom with its willingness to pay $5 million more than Viacom’s offer of $120 million. Bob Pittman of Pilot Group Ventures, the holding company of DailyCandy, says the service was expected to hit $25 million in revenue this year with an EBITDA of over $10 million.

DailyCandy is understood to have been on the block for years, with speculation from just last month that it would sell for $75 million.

After an online uprising against the order, Viacom tried to assert that they never requested personally identifiable information (they did), and later promised not to use the information to sue individuals. The value of that promise was questioned by us and many others.

The new order, filed this evening, states that Google will substitue user id’s and IP addresses for anonymous but unique identifiers. The full order is below, but the key language is:

When producing data from the Logging Database pursuant to the Order, Defendants shall substitute values while preserving uniqueness for entries in the following fields: User ID, IP Address and Visitor ID. The parties shall agree as promptly as feasible on a specific protocol to govern this substitution whereby each unique value contained in these fields shall be assigned a correlative unique substituted value, and preexisting interdependencies shall be retained in the version of the data produced. Defendants shall promptly (no later than 7 business days after execution of this Stipulation) provide a proposed protocol for this substitution. Defendants agree to reasonably consult with Plaintiffs’ consultant if necessary to reach agreement on the protocol.

Without IP addresses and user names it will be significantly more difficult for Viacom to determine which individuals may have viewed any particular video. I for one have no further objections to this data being handed over from a privacy standpoint, although I still urge Viacom to stop the endless litigation and consider more innovative business models around their content.

http://www.docstoc.com/docs/wrapper.ashx?doc_id=949507&swf_url=http%3A//content1.docstoc.com.s3.amazonaws.com/google_youtube_viacom.pdf.swf&enableFullScreen=1
google viacom youtube agreement – Get more Legal Forms

We and others cried out in protest, since the data being delivered included username, IP address and identifiers of all videos viewed on YouTube. And the entity it was being delivered to has a penchant for litigating over copyright infringement (some of their many lawsuits are mentioned in the original post). The fear is that if data is turned over to Viacom, any YouTube user who has watched a copyrighted video would be subject to a lawsuit.

Viacom’s first line of defense when the negative press hit was obfuscation. They said “Viacom has not asked for and will not be obtaining any personally identifiable information of any YouTube user. The personally identifiable information that YouTube collects from its users will be stripped from the data before it is transferred to Viacom.”

Sounds good, right? The LA Times mentioned it in their article on the issue and quoted Viacom. A number of other publications then followed, saying that Viacom wasn’t going to collect all the data they were entitled to under the order.

But not really. Everyone involved in the lawsuit (except the users, who weren’t asked) agreed that a YouTube login ID isn’t personally identifiable. The original Stanton order summarized: “Defendants do not refute that the “login ID is an anonymous pseudonym that users create for themselves when they sign up with YouTube” which without more “cannot identify specific individuals”.”

So Viacom didn’t abandon any of their data rights, but they sure went out of their way to suggest they did. And anyone who watched the 2006 AOL search debacle will know that users were absolutely identified based on nothing more than a list of the search terms they entered. Does anyone really believe that a motivated plaintiff couldn’t identify individuals based on a user selected ID (mine is “TechCrunch”), IP address and a list of all watched videos?

Now Viacom is talking again, and saying that they won’t use the information to go after individuals.

Here’s the problem – I don’t know if Viacom will live up to their promise, or not. The fact that Google is unwilling to hand over employee data tells me they’re not so sure, either. And frankly I shouldn’t have to care or have to worry about Viacom’s trustworthiness. As a user I interacted only with Google, and there are implicit and explicit promised by Google to protect my data. If Google hands my data over to Viacom, it doesn’t really matter to me if Viacom uses it or not. All I will remember is that Google gathered and stored information without my consent, and then handed it over at the first sign of trouble.

Google’s self imposed code of conduct is “Don’t be evil.” It doesn’t say “don’t be evil unless there’s important litigation at stake.” Google’s reputation is on the line, and how they respond will show their true character. They’ve shown they’ll go to bat for employees, now it’s time for them to show they’ll go to bat for their users.

But if it can’t, perhaps it should comply with it in a creative way. The data in question are data logs containing the records of every video watched on YouTube, by whom, and at what times. The court is also ordering that Google hand over all videos that have ever been taken down for any reason. The logs alone take up 12 terabytes. Google should print them out and deliver them on paper.

It would literally fill up the Library of Congress. That is roughly the equivalent of all the printed books in the Library of Congress (by one estimate, others put it at 20 terabytes—either way, it’s a lot of paper). The court order never states what form, the data must be delivered in.

(Photo via, appropriately enough, the Library of Congress And hat tip to reader Paul Christiansen for the original suggestion).

Louis L. Stanton, the senior judge on the United States District Court for the Southern District of New York, issued the opinion and order, which is here (PDF).

That data includes every YouTube username, the associated IP address and the videos that user has watched on YouTube. Google will also be required to hand over copies of every video removed from Youtube for any reason (DMCA notices or user-initiated deletions). Stanton dismissed Google’s argument that the order will violate user privacy, saying such privacy concerns are merely “speculative.”

Meanwhile, the judge denied Viacom’s request that Google turn over YouTube’s source code as it could “cause catastrophic competitive harm to Google by sharing them with others who might create their own programs without making the same investment.”

I can understand why Judge Stanton, who graduated from law school in 1955, may be completely and utterly clueless when it comes to online video services. But perhaps one of his bright young clerks or interns could have told him that (1) handing over user names and a list of videos they’ve watched to a highly litigious copyright holder is extremely likely to result in lawsuits against those users that have watched copyrighted content on YouTube, and (2) YouTube’s source code is about as valuable as the hard drive it would be delivered on, since the core Flash technology is owned by Adobe and there are countless YouTube clones out there, most of which offer higher quality video.

YouTube’s core value is in it’s network effect – the library of content along with its massive user base.

The privacy fallout of this ruling is spectacular. The EFF has already chimed in, noting that the order is highly likely to be in violation of federal law.

Judge Stanton doesn’t seem to care much about that law, for now. And he clearly doesn’t understand that far more data is being transferred than is necessary to comply with Viacom’s core stated concern, which is to understand the popularity of copyright infringing v. non-infringing material. Viacom has asked for far more data than that, and there’s only one use for that data: to sue individual users (or shake them down via the threat of lawsuit, which has been perfected by the RIAA) who have watched a few music videos or television shows on YouTube.

I say this with the utmost respect, but Judge Stanton is a moron. And Google simply cannot hand this data over without facing a class action lawsuit of staggering proportions.