Why doesn't Google just buy Viacom?

I have been seriously concerned for the last 10 years or so about the amazingly out of proportion influence the media/entertainment industry has been having over the legal system here in the United States.

We have seen the collective entertainment industry having a huge amount of power as “copyright holders” that is disproportionate to their economic contributions to society overall. The information technology industry, loosely including everyone from hardware vendors to software development to web services, is vastly larger than the media and entertainment companies in terms of their economic footprint.

The IT industry earns hundreds of billions of dollars per year and has created hundreds of thousands of jobs in the United States and worldwide that generally pay much higher salaries than almost any other industry.

The argument is well-formed that the entertainment industry has a widespread societal influence in the form of news, movies, television, and music. However, the IT industry has allowed hundreds of millions of people worldwide to communicate and share culture in ways never before possible in the history of our species. The web and gaming industries have largely supplanted the intake of news and entertainment by people in the 18-49 year old demographic . (“Web and gaming” is my own interpretation and not written in the Variety article.)

The short-summary of my point is this: The IT industry is much more important in its economic and social contributions to the world than the media/entertainment industry.

A judge, Louis L. Stanton , ruled that Google has to hand over an absolutely massive amount of data to Viacom as part of an ongoing lawsuit against Youtube. The repercussions are enormous if Google has to comply with this order, but the the details are summarized in other places so read there for more specific information .

To think that my viewing habits are going to be made available to Viacom and any of its subsidiary companies is sickening. I know that by viewing a particular site, they are collecting logs. Whether its Youtube or Hulu, each company has its own tracking data. I expect this and accept this. However, when a court is forcing Party A to give Party B that information, which Party B will then do anything they want with, that makes me sick to my stomach.

It is my firm belief that the reach of the media/entertainment industry’s influence over the court system and Congress in the U.S. is seriously out of balance, and that the IT industry is seriously under-balance for its economic size and beneficial impacts on society.

To illustrate this, look at the market caps for Google and Viacom . As of the time of this posting, Google’s market cap is $168.67 billion dollars. Viacom’s is only $ 18.77 billion. In almost all categories on the linked-to Yahoo Finance pages, Google outperforms Viacom financially.

Some major players in the IT industry have started working together to counteract some of the extremes of the current broken legal system in the U.S. Cisco, Verizon, Google, HP, and other companies are joining together to buy and share key intellectual property to prevent patent squatters from suing their companies. IBM is buying a company called Platform Solutions in a similar bid to prevent further litigation against it. I present the IBM article as a reference to similar anti-litigation tactics, and not as a pro/con opinion about the nature of the buy-out.

The IT industry needs to take larger steps to reign in the power of these mid-size media/entertainment companies. So to quote the topic of this article, “Why doesn’t Google just buy Viacom?”

Update(7/3/08 @ 6:02pm PST):

A commenter, lakeeffect, over at Hacker News left a link to a really funny and relevant video from Stephen Colbert that I wanted to share here.

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