Google's ultimate nightmare scenario

We have all heard the recent buyout of Youtube by Google. How Google bought Youtube for $1.65 billion and how it turned the fortunate founders into instant multi-millionaires. But what we don't realize is the gigantic leap-of-faith Google has taken toward this acquisition.

Youtube has grown immensely in recent years largely thanks to its specialized video sharing technology. Any registered user can easily upload a video online to share with peers, family members or strangers. Not only is its video upload is easily, it's channel customization is also one of a kind. With all these fancy decorations readily available to entice one's appetite and its clear stance against massive consumer advertisement, there is no surprise that Youtube is able to captivate, attract and retain potential users, particularly within young adolescence and teenager populations. However, Youtube also has its own set of problems. With the amount of freedom Youtube has given to its users, the number of unauthorized and copyrighted materials being posted is on a steady increase. It is now up to Google to decide what to do. It can either keep its list of audiences and attract other potential members, or be more stringent as to what are posting materials and unleash its advertising technology. Eventually, Google will have to juggle between "ethic" business practices and friendly user environment because for a Nasdaq-listed corporation bottom line is everything.

Same thing is happening right now on our own community, the blogosphere. Google's very own Blogger (a.k.a. Blog*spot), which Google acquired back in early 2003 is now rampant with information (i.e. file) sharing. Take a look for example the illegal posting and download links of popular MP3's originated, surprisingly, not from North America and Europe but from Latin America, where the governing laws on music piracy is weak. With just a few clever searches, one could easily download illegal mp3's from sites as far as Brazil. The downloads are usually redirected to popular file-sharing sites such as Rapidshare, Up-file, and Megaupload, where the web hosting is free, fast and readily available for North American users. Can we blame Google? No, since it is in our own blood to be greedy and, especially for the music lovers, an insatiable appetite to want more. With the rapid criminalization of file-sharing software such as Napster and low-bandwidth services such as Bit-Torrent, going Google is the only way. With blogging becoming ever popular and the tremendous growth of blogosphere, it is only a matter of time before this community becomes the favorite place amongst file-sharing enthusiasts.

What happens then would truly be THE ultimate nightmare scenario for Google. Both Blogger and Youtube would become THE favorite for legal teams of major record companies, movie producers and software developers worldwide. Ultimately, a brilliant and visionary company like Google would be immersed in a pool of lawsuits. It's only way out is to have a deterrent in places like Youtube and Blogger to administer, identify, prevent and take down any potential illegal materials before and soon after they're posted. BBC summarizes the best:

Should Google lose a major YouTube court case and its share price suffers as a result, the company will have to brace itself not just for a deluge of lawsuits from copyright owners but disappointed shareholders as well.

No doubt Google will have to work hard to steer YouTube into safe waters.

Solid content identification, video watermarking, royalty reporting and clearer upload guidelines for YouTube members are a must.

There is just one drawback: For some members that could take all the fun out of YouTube.

Without fun, they might go elsewhere.

And then Google's deal would look much less like a bargain.

For now, Blogger and Youtube are like time-bombs ticking away. Will Google be ready when they explode? Or, will Google be smart and prevent such a traumatic event from happening and at the same time retaining its users? Maybe this is why it's hesitating on releasing Blogger Beta?