What Eric Schmidt Meant When He Said Google Wasn't Holding $500 Million From YouTube For Lawsuits: We're Holding $200 Million

from the semantics dept

Remember the rumor, kicked off by Mark Cuban, that Google was holding back $500 million from YouTube in escrow to deal with potential copyright infringement lawsuits? Yes, the same claim that Google CEO Eric Schmidt clearly denied was true last week. Well, it seems that when he called it false, it appears he only meant the number, not the concept. Today it came out that Google has actually put aside a little over $200 million in an escrow account, almost exactly as the original email Mark Cuban posted described. It's to handle potential legal costs associated with copyright lawsuits. While it's not nearly as much of the deal as originally suggested, it still is a significant chunk. There's a second interesting tidbit in the article as well. While some had suggested that YouTube actually has been profitable, apparently, the company was so hard up for money, it needed to borrow $15 million between the time the deal was announced just over a month ago and its closing of the deal yesterday.
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  1. identicon
    Rob Hyndman, 15 Nov 2006 @ 3:40am

    What he said

    Mark is right. The holdback is very plain vanilla.

    The new about YouTube being cash flow negative is interesting, though. In the weeks leading up to the sale lots of folks in the 'sphere made much hay out of a suggestion that it was cash flow positive.

    Plus ca change ....

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