SUN VALLEY, Idaho (Reuters) - Google Inc. on Friday took a swipe at media conglomerate Viacom Inc. which is suing for $1 billion over “massive copyright infringement” by its video sharing Web site YouTube.
Google Chief Executive Eric Schmidt, speaking with reporters at a hotel bar at the 25th annual Allen & Co. moguls meeting, said litigation was the foundation of the company that owns the MTV Networks, Paramount movies studio and video game developer Harmonix.
“Viacom is a company built from lawsuits, look at their history,” Schmidt said on early Friday.
“Look who they hired as CEO, Philippe Dauman, who was the general counsel for Viacom for 20 years,” he added.
Viacom has demanded that YouTube takes down thousands of segments from its popular programs including The Daily Show with John Stewart, The Colbert Report and South Park.
The two sides have failed to reach a settlement ahead of the case, which begins in earnest this month.
Schmidt alluded to Viacom’s high profile 1989 $2.4 billion antitrust suit against Time Warner Inc..
The suit claimed Time Warner’s HBO pay cable movies service attempted to put Viacom’s rival service Showtime out of business by intimidating cable operators and Hollywood studios to give preferential treatment to HBO.
The suit was ultimately settled out of court by 1992. As part of the settlement, Time Warner paid $75 million and agreed to purchase a cable system owned by Viacom for an above market price, as well as agree to distribute Showtime more broadly on Time Warner cable television system.
Separately, Schmidt said the surge in popularity of Internet social networks such as News Corp.’s MySpace and Facebook would ultimately be positive for Google.
Google, whose main source of revenue come from selling advertising based on text keyword searches, relies on its catalog of documents from the Web, its so called index.
But sites such as Facebook, whose members and third party companies have rapidly created new content for Facebook, prevent the indexing of its pages.
Schmidt said the closing off of social networks was a “transient” phase and that these companies will eventually see the value of open borders.