OK, so Eric Schmidt is a moron

CNET News.com's Charles Cooper writes that Google's $1.65 billion deal for YouTube puts Mark Cuban in the position of soothsayer.

So it's settled: Eric Schmidt is a moron. Only a couple of weeks ago tech bad boy Mark Cuban publicly questioned the intelligence of anyone who would buy YouTube.

When Cuban delivered his speech to a group of advertisers, he said the risk of getting sued was simply too high. All you need is one mean lawyer with a solid case to make life oh-so-difficult. And let's not forget--YouTube is a company that depends upon contributed video uploads for its survival.

To the delight on the Wall Street crowd, Google announced Monday it would pay $1.65 billion to buy YouTube. If there's litigation in the future, Google's not sweating. With its fabulously deep pockets, the company knows it has the wherewithal to defend itself against annoyance lawsuits for the next millennium. In the meantime, management believes there's a way to mesh search monetization with the leveraging of social networks.

Is it possible that Schmidt, Google's CEO, blew it so badly?

I pinged Cuban, who said he hasn't changed his opinion. (Here's a link to Cuban's expanded comments on the blog he keeps).

YouTube indeed may become the future of contemporary entertainment, but right now it's still a site where I goof off and watch dumb cat videos.

Cuban's a clever guy and he knows how this business operates. In 1999, he sold Broadcast.com to Yahoo for more than $5 billion. That was a ridiculous sum for a money-losing dot-com outfit, but during the heyday of the Internet bubble, companies did deals to "acquire eyeballs." Tech companies swore they would never repeat that mistake (more about that in a moment).

Yahoo deserved what it wound up with--which in this case wasn't much. Cuban was smart to take the money and run. (For the record, the people managing Yahoo were so clueless that they paid another $2.8 billion to buy GeoCities the same year.) Yahoo's sundry stupidities paled in comparison next to Terra's $12.5 billion purchase of Lycos and @Home's $7.2 billion buy of Excite.

Things are different now, right? So the say the experts.

Schmidt obviously thinks this deal is anything but stupid. During a conference call with reporters and analysts, he even suggested this was the beginning of an Internet video revolution. YouTube co-founder Chad Hurley was no less enthusiastic when he declared that the nature of entertainment was changing.

But it's too early to work ourselves into another hyperventilating lather. Right now, this is a PowerPoint presentation with more questions than answers. Something about these grand predictions always leaves me flat. Talk all you want about potential revenue synergies, but haven't we seen this movie before? YouTube indeed may become the future of contemporary entertainment, but right now it's still a site where I goof off and watch dumb cat videos.

If Google's gambit eventually does pay off, it surely will fit with the times we inhabit. With a salute to the late Sen. Daniel Patrick Moynihan, the dumbing down of America is hardly news anymore. Fact is that much of the contributed material you'll find on YouTube makes for a monumental waste of an evening. Is it any coincidence that YouTube's become one of the most popular Web sites in cyberspace?

Aren't they only giving the people what they want? Sure they are. Schmidt, Hurley and the rest of their management may possess a better crystal ball. If Lonelygirl15 is a harbinger of societal tastes, Google stands to make even more billions in the months and years ahead.

At that point, Schmidt will rank as the wealthiest moron in history.

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