Google Bets Big on Videos

Legal concerns were a likely reason that, before Google announced the acquisition Monday, YouTube unveiled licensing deals with the world's two largest music labels, Universal Music Group and Sony BMG Music Entertainment, as well as with CBS Corp. The deals clear the way for music videos, television news, sports clips and entertainment programs to be distributed free on YouTube in exchange for a share of whatever advertising revenue may follow.

The deal with Universal silenced one of YouTube's most vocal critics, Universal Music Chairman and Chief Executive Doug Morris, who last month described the site as among a group of "copyright infringers" that "owe us tens of millions of dollars." He issued a brief statement Monday saying YouTube "is providing a new and exciting opportunity for music lovers around the world to interact with our content."

The timing of the announcements could hardly have been coincidental, said Lawrence Iser, a copyright lawyer with Kinsella Weitzman Iser Kump & Aldisert in Santa Monica. He concluded that it probably was a precondition of a deal with Google.

"It seems to me that Google said to YouTube, 'You need to make great headway in getting your licensing ship in order,' " Iser said.

Google executives said they would let YouTube operate as a separate entity, overseen by Hurley and Chen from new offices in San Bruno, Calif. YouTube moved Monday from cramped offices above a pizza parlor in San Mateo, Calif.

"Nothing's going to change," an exhausted-sounding Hurley said in an interview with The Times. "That's what excited us about the opportunity to work with Google. We have the ability to now stay independent, to continue with our vision, to concentrate on our community and our partners."

Hurley, 29, said YouTube had recently received $11.5 million in venture capital funding, but he would not reveal the company's revenue or whether it was profitable. He also declined to say how much he and Chen stood to make on the deal.

Chen, 28, said the acquisition would give YouTube the resources to pursue new ideas and features.

"We put aside a lot of things because of resource constraints," he said. "Google has immense resources to help us in the areas where we need help: search, advertising, bandwidth, the whole list of things that they're the industry experts on."