NBC and News Corp have enlisted several Google competitors (MSN, Yahoo, AOL) to be distributors in their content network; this may have caused some tremors at the Googleplex.



Looks like The Fear has stopped by Google for a gourmet lunch and a brief visit to CEO Eric Schmidt's office. Already facing a billion dollar copyright infringement lawsuit from Viacom over YouTube's hosting policies, Google now has NBC and News Corp assembling video forces against it with a rival project.

As the Wall Street Journal likes to do whenever Google crops up in the conversation, they have made their story available outside the subscription wall. News Corp president Peter Chernin had the money quote:

The new venture, which was reported earlier in the Los Angeles Times, could pave the way for NBC and News Corp. to negotiate a more favorable deal with Google than they could do on their own. Mr. Chernin said Google Chief Executive Eric Schmidt called yesterday and said Google will consider signing on as a distribution partner. A Google spokesman confirmed a call took place, but declined to comment on what was discussed.

"We value our relationships with NBC and Fox," YouTube said, noting the networks continue to use the site to run promotional clips.

Publishing 2.0 blogger Scott Karp wrote about this, saying, "After spending $1.65 billion on YouTube, that must have been a tough call to make."

Such feelings run counter to the internal scuttlebutt overheard by Mike Arrington at TechCrunch. He stated the internal chatterers at Google have been calling the NBC/News Corp project "Clown Co."

If Schmidt is calling people and asking to be part of the new project, as an extension of the existing relationships Google has with both broadcast networks, there may be some fear that YouTube's merry-go-round of content could break down the business.

$1.65 billion is a lot to pay to find out for certain, even if it was all in stock.

Google, YouTube, News Corp, Peter Chernin, Eric Schmidt