The rumored $500 million infringement liability reserve that Google supposedly set aside when it bought YouTube turns out to be…only $224 million. As the wire services reported yesterday, Google, when it issued its announcement that the YouTube acquisition had closed, said that it was holding 12.5% of the stock in “escrow for one year to secure certain indemnification obligations.”
That translates into around $224 million, not a huge sum given the deal’s value, but the point is CEO Eric Schmidt denied last week that Google had set aside $500 million to cover the costs of copyright infringement liabilities it might be incurring with YouTube. I, like most people, bought Schmidt’s denial, although I wondered at the time why his denial wasn’t more vigorous. Here’s what I wrote:
Based on what I’ve read, Schmidt wasn’t real chatty about the details of this rumor, other than to deny the report. To quell any further repetition of the idea that Google put money in escrow to deal with copyright infringement matters, Schmidt could have been more fulsome in his denials.
As it turns out, Schmidt was low-key in rebuffing the rumors because although the dollar amount was wrong, there was in fact an infringement liability escrow. As Mike at TechDirt writes “Well, it seems that when he called it false, it appears he only meant the number, not the concept.”
Hmmm….don’t know whether to congratulate Schmidt or castigate him about the hair-splitting.
Cynthia Brumfield at 8:57 AM|Comments(0)
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