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Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

May 31, 2007 at 11:24 AM

Viacom boss: We’ll build more than buy

CARLSBAD, Calif. — So Viacom won’t be buying Facebook, apparently.

Philippe Dauman, the new chief executive of the media giant who made waves by suing YouTube over copyright violations, said during a D session today that he may buy some smaller companies but isn’t interested in blockbuster acquisitions.

“We’re focusing on creating things within Viacom … rather than paying an inflated price for an outside company,” he said.

“I’d rather spend the extra $700 million developing new experiences,” such as the virtual worlds built around Viacom franchises such as SpongeBob.

Regarding the ongoing lawsuit, Dauman said Google Chief Executive Eric Schmidt called shortly after he took over Viacom nine months ago and they tried to negotiate a deal. Sticking points included how much control Google would have over Viacom content on YouTube, how Google would sell ads around the content and whether Google could contact Viacom’s advertisers, he said.

Dauman spoke at the D conference after YouTube founders Chad Hurley and Steve Chen. They had stressed that they’re educating consumers about copyright laws on their site, drawing guffaws from moderator Walt Mossberg.

Dauman said he was glad to hear them talking that way.

“Well, I think maybe they’re starting to get the idea. I may have helped provide a graduate education in copyright,” he said.

The big disclosure by Hurley and Chen was around YouTube’s plans to start inserting ads in videos within a few months. Chen said their testing found that consumers were turned off by 30-second ads that play at the start of videos.

“I don’t think we’ll ever do 30-second pre-rolls,” Chen said. “I think it’s going to be somewhere between five and 10 seconds, as well as making it as relevant as we can.”

Hurley said content creators would have the option of participating in the system, which would share revenue with them along the lines of Google’s AdSense system. The site is already testing the approach.

“Within the next few months we’re going to roll out more video-centric advertising,” Hurley said.

Comments | Topics: D conference, Digital media, Google

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