Google vs. MySpace.com : YouTube Fallout

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Google vs. MySpace.com : YouTube Fallout

Sure, the plans to acquire YouTube for $1.65 Billion in Google stock (sound familiar?) has sent ripples around the Internet, with some raving about the genius of Google to acquire this amazing video sharing company, and others blasting it as a trainwreck waiting to happen.

In my opinion, Google would not have entered into this agreement with YouTube without doing their homework, and for those who believe that YouTube is nothing but online videos in a sea of similar sites with the same offerings, it could be said that Google is the same.

But what differentiates Google from the pack is their relevancy, reputation, and successful monetization of search. Separating YouTube from the DailyMotion’s and Google Video’s of the world is community. Google needs community, YouTube needs monetization.

Google should have no problem selling contextual and video ad inventory on YouTube, and don’t be surprised if this Google Venture leads to a more diverse and robust YouTube, as Internet video makes its way into our televisions, cars, kitchens and cell phones.

The underlying controversy behind the Google YouTube deal however may be some saltiness behind the scenes at Fox Interactive and MySpace.com, which signed a rather lucrative $900 million advertising & search deal with Google this summer; and considers YouTube to be intense competition.

Over at Screenwerk, Greg Sterling unearths a piece from the Wall Street Journal which touches upon this future rift between Fox Interactive and Google.

Over the weekend, News Corp. executives expressed their displeasure with the deal to Google and threatened to remove any links to YouTube videos placed by users on their MySpace blog pages, according to a person close to the situation.

Google’s Mr. Schmidt and Advertising Sales Vice President Tim Armstrong are scheduled to meet this week in Los Angeles with News Corp. Chairman Rupert Murdoch, President Peter Chernin and Ross Levinsohn, head of its Fox Interactive Media online unit, to discuss the matter.

From personal experience I’d bet that almost half of the videos I view on MySpace profiles are embedded via YouTube, and in MySpace’s opinion, such services could be seen as parasitic, feeding off the popularity of MySpace…

“If you look at virtually any Web 2.0 application, whether its YouTube, whether it’s Flickr, whether it’s Photobucket or any of the next-generation Web applications, almost all of them are really driven off the back of MySpace.”

Here’s a question. If Google somehow integrates AdWords into YouTube videos, via Google Video Ads or a post view suggestive text link.. especially in embedded videos which are served on MySpace or other web sites, will the publishers who own those sites be reimbursed by Google?

Meaning, will Google have to pay MySpace for YouTube ads which are broadcast via embedded videos on MySpace.com pages?

Perhaps this is part of the big meeting this week between the two companies. If Video is the Future of Google, and MySpace’s Future is Video Entertainment… then I’m guessing we’re going to possibly see a lot more friction between these two companies in time to come.

Loren Baker
Loren Baker is the Founder of SEJ, an Advisor at Alpha Brand Media and runs Foundation Digital, a digital marketing strategy & development agency.
Loren Baker
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