YouTube-CBS deal unravels: WSJ

NEW YORK (Reuters) - A deal between Google Inc. and CBS Corp. that would let YouTube users watch clips from CBS shows such as "The Late Show with David Letterman," has unraveled, the Wall Street Journal reported on Wednesday.

The two companies had been closing in on a multi-year deal, the paper said, citing people familiar with the matter. The companies also discussed ways to peddle CBS Radio advertising spots to Google advertisers, the paper said.

But the media company and the Internet search company could not agree on issues such as how long the deal would run, the paper said, citing a person knowledgeable about the talks.

Although the talks could be revived at some later date, the paper said, for now Google and CBS intend to work together only on more modest initiatives.

Google, which agreed last year to acquire YouTube for $1.65 billion in stock, is currently working on a deal to offer video from the British Broadcasting Corp., the paper said, citing people familiar with the matter.

Traditional media companies are looking for ways to court online users as viewers split their leisure time surfing the Web and using digital media devices like Apple Inc.'s iPod.

Media companies including Viacom Inc., News Corp. and General Electric Co.'s NBC Universal have discussed launching their own joint competitor to YouTube, but industry sources have said earlier that differing interests have stalled plans.

CBS and Google were not immediately available to comment.