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  Anonymous Coward, 19 Oct 2006 @ 12:34am

  
  

  Is that legal?

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  Noni, 19 Oct 2006 @ 1:07am

  
  

  Who cares if it is legal so long as someone made off with a pile of cash... people rob banks for that very reason

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    Brad Eleven, 19 Oct 2006 @ 2:11pm

    
    

    Re: Noni (who cares?)

    > Who cares if it is legal so long as someone made off with a pile of cash?
    
    Oh, yeah. Just like Iraq.

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  Anonymous Bored Coward, 19 Oct 2006 @ 1:21am

  
  

  What's wrong with this?
  
  Shareholders in YouTube gave up some of the Google equity that would have been theirs if they hadn't done the deal with the music cos.
  
  It was Google equity that would have belonged to the YouTube shareholders - I don't see how this is Google's money.
  
  How can it be illegal? Unless some minority shareholder was tricked into giving their equity to the music companies for less value than the Google shares - without knowing that the Google deal was imminent.
  
  Sounds like a very sensible deal for everyone:
  
  YouTube - Google may have made this a condition precedent
  Google - no lawsuits
  Music Cos - Google shares
  
  Oh - and typically stupid reporting from Techdirt.

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  nodream, 19 Oct 2006 @ 1:39am

  
  

  Insider Trading

  Isn't this what is usually called insider trading? Trading with forknowledge? Isn't that what landed Martha Stewart in Prison?

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  Anonymous Coward, 19 Oct 2006 @ 2:26am

  
  

  Insider trading is different, it's when you are in a position where you have more knowledge about something than the public, and you utilise that by buying/selling shares. For example if you were the head of AT&T, and you had a piece of paper on your desk saying the company was about to go up in value a shitload, and you buy more stock. That's insider trading.
  
  This is just money fetching, which is a pretty good idea, and another easy way to get money.

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  Nobody Special, 19 Oct 2006 @ 3:32am

  
  

  assumptions

  There appears to be an assumption that disclosure wasn't followed. One can disclose to the proper people without involving the media. And as for the Youtube shareholders - who are they? I don't recall them going public. Thus the only shareholders were probably present at the table.
  
  I would suspect that Google knew that this was on the table and may even have made it a condition. Keep in mind that Google doesn't really want to be sued. And the deal may have been part of why Google paid such an astrnomical price. Part of the price was money to pay of the lawsuit happy rats. The deal sounds much better to me now. Google is happy as they didn't want the suit. The creators of YouTube are happy as they got a pocketfull of stock. And the record labels are happy as they got their unfair share.
  
  The deal most likely had to be completed before Google would sign in. They couldn't afford the exposure.

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    Mousky, 19 Oct 2006 @ 8:06am

    
    

    Re: assumptions

    Except that Google did not pay an astronomical price. They 'paid' this acquisition with Google shares. It's all paper money.
    
    I'm fairly certain that Google knew and fully supported these equity stakes. Remember that Google intends to run, for the time being, YouTube as an independent company, probably as a shield from future litigation.

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  Krish, 19 Oct 2006 @ 5:16am

  
  

  This is indeed crafty work by Google's lawyers / Management to ward off costly ( copyright infringement ) future litigations and the disrepute that may have ensued.
  
  YouTube has not been a Public quoted company and is free to allot shares to any investor as it may deem fit, either for cash / consideration other than cash so long as its existing stock owners do not have objection. At best, only one who could've objected to this transaction is Google itself since there are "material changes in stock ownerships" which went unreported during the due diligence it (had) conducted on YouTube weeks before. ( As per the report the deal with record labels was closed only hours before Google announced its deal with YouTube ).
  
  Since Google has not objected to this, there's every reason to believe that it was Google's idea to buy peace with Record Labels, as is evidenced by convenient omission of YouTube name from the lawsuits announced by Universal Music.
  
  Did you say Surbanes Oxley...?

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  The Original Just Me, 19 Oct 2006 @ 5:52am

  
  

  To: Anon Coward on Oct 19th, 2006 @ 1:21am

  If you're going to be an idiot at least post with a name so it's easier for us to ridicule you.

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    KenEngland, 19 Oct 2006 @ 8:06am

    
    

    Re: To: Anon Coward on Oct 19th, 2006 @ 1:21am

    Raw,Raw,Raw. Yea! straighten out your act. You make it bad for the rest of us.

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  Anonymous Coward, 19 Oct 2006 @ 6:07am

  
  

  Something about this sounds shady..
  
  Not sure if it's illegal, but from a taxing perspective doesn't this mean that Universal will be taxed for a capital gain rather than a settlement/profit (depending on how they would have received the cash otherwise)?
  
  Also, from an accountability perspective, doesnt Google or You Tube need to notify its share holders before transferring equity over?

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    Roger, 19 Oct 2006 @ 7:15am

    
    

    Re:

    It may be a capital gain but (a) it's a short-term gain so for an individual it would not receive a favorable tax rate and (b) these are corporations, not individuals, and corporations do not get favorable tax rates on capital gains.

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  MartinE, 19 Oct 2006 @ 6:50am

  
  

  It's no different than settling a lawsuit before going to court. They simply headed off the spector of IP lawsuits by paying off the potential litigator.

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  kwilson, 19 Oct 2006 @ 6:57am

  
  

  Another NY SLime report of Anti Business

  Funny how the NY SLime always reports or shall I say misreports facts.
  This paper is the very one that gives away National secrets to our enemies.
  This paper is aways Anti- American- anti capitlaist.
  (Of course they love making millions themselves- just don't you do it.)
  I would take anything the NY Slime reports as nothing more than toliet paper.
  So remember the to consider the source... THey have a notable track record.

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  Anonymous Coward, 19 Oct 2006 @ 7:13am

  
  

  Re: Another NY SLime report of Anti Business

  you mean the national secrets that we and the terrorists already knew about?

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  jb, 19 Oct 2006 @ 7:16am

  
  

  Broadcom did this a few times. I'm in a rush, but I think the relevant documentation is in their FY2000 10K in the discussion of "performance-based warrants."

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  Anonymous Coward, 19 Oct 2006 @ 7:33am

  
  

  NY SLime....er...??

  do you mean the NY Times?
  
  i thought they were a pro-right wing paper?

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  Anonymous Coward, 19 Oct 2006 @ 8:02am

  
  

  Ooo.. YouTube is going to end up in a halfway house. SNAP.

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  Petréa Mitchell, 19 Oct 2006 @ 8:46am

  
  

  Yes, it's probably illegal

  A blog entry at ZDnet is pointing to an SEC regulation that this probably violated. Here's the SEC's site on that regulation.

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    Egat, 19 Oct 2006 @ 8:57am

    
    

    No it's not even close to illegal

    Hooray for posting without reading!
    
    from the SEC link:
    selective disclosure of information by publicly traded companies
    
    Let me just be really clear here. YouTube does not fall under SEC regulation because they ARE NOT A PUBLICLY TRADED COMPANY.

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      Petréa Mitchell, 19 Oct 2006 @ 9:16am

      
      

      Re: No it's not even close to illegal

      And Google?

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  OperaFan, 19 Oct 2006 @ 9:15am

  
  

  Google/YouTube Deal isn't complete yet

  The YouTube/Google deal is not scheduled to complete until 4Q 2006. A lot of corporate and legal maneuvering could happen in the next few weeks.

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  Anonymous Coward, 19 Oct 2006 @ 10:05am

  
  

  Google bought a private company, who cares? How many of you retards understand that insider trading refers to public companies?

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  Anonymous Coward, 19 Oct 2006 @ 11:12am

  
  

  If you're not a lawyer don't act like one.
  
  Would someone who actually knows about this post something relevant?

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  Shohat, 19 Oct 2006 @ 11:54am

  
  

  Great Idea , win win win for everyone

  Google get's lawsuit free Youtube , Youtube founders and the company get value and ability to grow , and the content owners get paid for their content , being used by other on Youtube .
  Not only is it all Legal , it's good for everyone !

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  Tom, 19 Oct 2006 @ 2:44pm

  
  

  i'm not a lawyer, but this seems phenominally illegal.

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  pwb, 19 Oct 2006 @ 3:26pm

  
  

  Tom, that's why you're not a lawyer. There's nothing remotely illegal about this. Companies give out equity to partners and service providers *all* the time.

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  Anonymous Coward, 19 Oct 2006 @ 5:51pm

  
  

  the irony: isnt universal now liable?

  so if universal is an equity owner of you tube can someone now sue them? Maybe one of their own artists (the beegees for instance whose older clips the label might now have any rights to) or even better some grouper employees...
  
  As part owners of youtube is it not a bit silly that they are now

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  IANAL, but..., 19 Oct 2006 @ 11:15pm

  
  

  Worth investigating...

  This is certainly very shady and even though YouTube was not a publicy traded company, the structure of the deal was clearly designed to benefit entities that most likely knew of the impending sale of the company to a publicly traded company. They must have recognized that the deals would have a positive impact on Google's share price once the announcement was made because it helped reduce concerns about lawsuits and gave the appearance that the record labels had decided to work with YouTube/Google. This definitely has the appearance of coordinated dealmaking designed to have an impact on the market for the benefit of certain parties.
  
  IANAL but I do see some issues with this that may have violated SEC regulations. It's certainly worth an investigation and if I were one of the media companies that hasn't done a licensing deal, I would probably be looking into suing Google, YouTube and these record labels because each party profited enormously from what they knew to be infringing behavior taking place on the service. In essence, these record labels took a large bribe to do a deal even though they knew this was supporting a company with some major copyright issues. The Bertelsmann/Napster case and settlement provides some justification for this type of argument. In that case, the plaintiffs argued that Bertelsmann's investment in Napster kept the company alive and facilitated continued infrigement of the plaintiff's copyrights, especially because Napster may have not survived without Bertelsmann's financial support. In this case, if Google, YouTube and the record labels put this deal together specifically to cement Google's purchase, other copyright holders might argue that each party specifically acted in a manner that enables YouTube/Google to keep infringing.

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  Gerri, 2 Apr 2007 @ 9:22am

  
  

  Very interesting!

  I had not read this before but it explains a lot.

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  Emad Hassan kenona, 15 Apr 2007 @ 11:03am

  
  

  Iam ready to work with you now

  I like quick chance to work with you .

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    Emad hassan kenona, 16 May 2008 @ 6:47am

    
    

    Re: Iam ready to work with you now

    Nice to hear you need me to work with you and how?
    My Email :emadkenona@yahoo.com

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  Emad Hassan kenona, 21 May 2008 @ 4:23am

  
  

  It's fair

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