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Google knew YouTube did evil, but bought it anyway
Do no evil? Google execs knew YouTube was in the wrong, but swallowed hard and bought it anyway, emails disclosed to a US court show. In 2006 execs at the Chocolate Factory were aware that the startup was less than wholesome, describing it as a "rogue enabler of content theft" whose "business model is completely sustained by pirated content" - in emails now made public. They acknowledged it would raise ethical questions.
In October the same year, Google acquired the video site for $1.65bn. The cynical calculation meant swallowing a few principles.
"I can't believe your [sic] recommending buying YouTube," wrote Google Video business product manager Ethan Anderson to Patrick Walker, a senior Google executive. "Besides the ridiculous valuation they think they're entitled to, they're 80% illegal pirated content."
To complete the purchase, Google's definition of evil needed to become as flexible as The Invincibles' Elastic Girl. David Eun, content manager at Google wrote:
"As Sergey [Brin] pointed out, is changing a policy to increase traffic knowing beforehand that we'll profit from illegal downloads how we want to conduct our business? Is this Googley?"
In other documents, YouTube's co-founder Steve Chen declared that YouTube should "concentrate all our efforts in building up our numbers as aggressively as we can through whatever tactics, however evil".
And so Google rewarded evil: Chen received Google stock worth $310m from the acquisition. It has since increased in value. YouTube investor Sequoia Capital realised over $500m from a mere $9m investment. If you're wondering just what technological innovation or original idea Google was supporting - you'll be scratching your head for a long time. The value of YouTube was its collection of other's people's stuff.
Google's escrow fund for paying rightsholders is now believed to be around $1bn.
The emails are a devastating indictment of Google's ethics - and the Chocolate Factory must have anticipated the damage the disclosures would cause. Overnight Google launched a spoiler, leaking a batch of emails alleging that Viacom uploaded its own material to the site. It's embarrassing, for sure, but not in the same ballpark - Viacom's property is Viacom's property to do what it likes with. ®