NOVEMBER 16, 2006
Technology
By Catherine Holahan
Cuban Talks Trash to YouTube
Mark Cuban ridiculed Google for purchasing the copyright lawsuit-prone YouTube. Now he may be ready to back an adversary to prove his point
Verbally bashing YouTube is apparently not enough for billionaire "blog maverick" Mark Cuban. Now the Dallas Mavericks owner and tech entrepreneur is reportedly considering acquiring the independent news agency that's suing the video-sharing site for copyright violations. The brash move, if it goes through, would undoubtedly escalate Cuban's war of words with Google (GOOG), which closed its $1.65 billion stock purchase of YouTube Nov. 13. In fact, it could force Cuban to put his money where his outspoken mouth has been.
Before Google announced it would purchase YouTube, Cuban publicly criticized the company and anyone else thinking of buying it. "Would Google be crazy to buy YouTube? No doubt about it. Moronic would be an understatement of a lifetime," he wrote in an Oct. 7 blog post. After Google announced it would buy the site, Cuban penned another post titled "I still think Google is crazy."
Gray Areas Cuban's chief complaint with YouTube is shared by many analysts and legal experts—the site is vulnerable to copyright lawsuits. Though YouTube has a policy of removing copyrighted content once alerted to its existence and is working to block copyrighted content from being posted, the sheer volume of videos uploaded to the site makes the task difficult (see BusinessWeek.com, 10/10/06, "YouTube's New Deep Pockets"). It doesn't help that determining the rightful copyright owner can be confusing when it comes to the borderless Web (see BusinessWeek, 8/7/06, "Whose Video Is It Anyway?").
On July 14, independent photojournalist Robert Tur—known for videotaping the Los Angeles riots and O.J. Simpson's flight from police in his Bronco—sued YouTube for allowing users to upload his videos and, allegedly, profiting from advertising on pages where his videos posted. According to tech-news site CNET.com (CNET), it is Tur's company, the Los Angeles News Service, that Cuban is courting. Cuban did not return e-mail requests for comment. Tur could not be reached by phone.
YouTube's official legal position is that Tur's suit is without merit because its takedown policy complies with the Digital Millennium Copyright Act. However, both Google and YouTube have taken additional measures to limit their legal liability and prepare for some perhaps-inevitable lawsuits. Both companies have struck deals with content providers such as Universal Music Group, CBS (CBS), and Warner Music Group (WMG), gaining permission to show their videos. The deals help ensure that these entities won't sue when their content appears on YouTube.
And when Google closed the YouTube deal, it also disclosed that it's holding 12.5% of the stock deal, or $200 million, in escrow for one year to handle lawsuits pertaining to YouTube.
What's At Stake Google may need a big chunk of that money if it ends up taking on a Cuban-backed Tur. Cuban has considerable financial resources he's capable of mobilizing in court against Google. He sold his Internet radio broadcast company, Broadcast.com, to Yahoo! (YHOO) for more than $5 billion in 1999 and is reportedly worth well over a billion dollars.
He is also clearly interested in the case. So interested, in fact, that he dedicated a Nov. 14 posting on his blog to a motion for summary judgment filed by Tur's lawyers. "To say the stakes are huge would be an understatement," wrote Cuban, who subsequently highlighted an argument made by Tur's legal representatives.
Still, any court battle with Google would not be easy. With a market cap of $150 billion, Google's potential legal resources are formidable, to say the least. It also has a reason to fight hard if Tur's case makes it before a judge. A ruling that simply taking down copyrighted content does not avoid liability could open the floodgates to others suing Google over copyright infringement. Google has a substantial interest in ensuring that platforms such as YouTube and Google Video are not liable for copyrighted videos uploaded to sites provided they make an effort to keep it off. The less required to be considered a good faith effort, the less risk Google assumes when allowing users to post video content.
By becoming involved in a Google fight, Cuban risks exposing himself to embarrassment in addition to costly legal fees. After all, with all the noise he has made on his blog, Cuban is already facing a big "I told you so" from Google if YouTube turns out to be wildly successful. The more invested he becomes in seeing YouTube lose a copyright battle, the more vulnerable to bad publicity Cuban becomes if YouTube wins. The headline is almost too obvious: "Cuban, Who Is Crazy Now?"
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