They fear that giving programming to Google and YouTube could weaken their leverage in subsequent negotiations. And they would be ceding one of their most lucrative revenue sources -- the distribution pipeline.
People close to the negotiations said that the venture's mission wasn't to create a "YouTube killer." And they didn't rule out eventually striking a deal with Google in an effort to steer even more viewers to the new site.
"We think they could be a terrific distribution partner," said a second executive close to the talks. "We have a strong preference for working with companies that agree to protect intellectual property."
Conversations began last summer between News Corp.'s Chernin and former NBC Universal executive David Zaslav, who has since left to run Discovery Communications Inc. Both wanted to collect some of the companies' best shows and draw upon MySpace's huge audience.
Talks intensified last fall when Google announced it was buying YouTube. By then, News Corp. and NBC Universal saw that their plan to build a video island was too limited. They rejected the "if we build it, they will come" strategy.
"We needed to have hoses to fire people in," said one key architect.
That's when they approached Microsoft, Yahoo and AOL.
Yahoo CEO Terry Semel hinted about the deal Wednesday during a media conference in New York, saying that his company was "going to work much more closely with major content producers" and that an announcement could be expected "very soon."
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meg.james@latimes.com
dawn.chmielewski@latimes .com
Times staff writers Joseph Menn and Thomas S. Mulligan contributed to this report.
