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Week in review: YouTube honeymoon over for Google

Viacom files suit against the search giant--was Marc Cuban right? Also: Music and hacking at SXSWi, and Microsoft invests in speech tech.

Six months after Google announced it would spend $1.65 billion to buy YouTube, many are wondering if the video-sharing site's legal headaches outweigh its benefits.

On Tuesday, Viacom filed a $1 billion copyright lawsuit against YouTube and Google, its parent company. The lawsuit could end with YouTube making peace with Viacom, and in doing so find a way to mesh and monetize copyright content alongside user-generated content.

But it could also prove that perhaps Google's YouTube acquisition was a mistake, as Mark Cuban famously forecast on his blog. Many analysts predicted potential legal problems for YouTube, in lieu of the Napster legal decision. But Cuban, the owner of the Dallas Mavericks, chairman of cable network HDNet, and the guy who sold Broadcast.com to Yahoo for $5 billion in 1999, offered the now memorable, plain-spoken line "only a moron would buy YouTube."

Whether YouTube suffers the same fate as Napster may depend on the wording of the Digital Millennium Copyright Act (DMCA), which made its appearance in the U.S. Congress in July 1997 before video-sharing Web sites were envisioned.

It was drafted when Web site hosting was a more static affair, and doesn't clearly address YouTube's unique situation. Napster invoked Section 512, unsuccessfully, in its own legal defense regarding music-sharing.

Section 512's so-called safe harbor of the DMCA generally lets hosting companies off the hook for legal liability, as long as they don't turn a blind eye to copyright infringement and remove infringing material when notified.

YouTube meets the second requirement through a formal posted policy and by prohibiting the posting of unauthorized video uploads more than 10 minutes in length. It's unclear whether or not the court will agree with Viacom's assertion that YouTube has failed to meet the first requirement.

Viacom is expected to argue that Section 512 doesn't protect YouTube because the safe harbor applies only if a Web site does not financially benefit directly from the alleged infringing work.

Attorneys for Google said Section 512 provides more than an ample shield.

Evidence from a decade ago suggests that politicians never meant to completely immunize a service like YouTube, which could survive without copyright infringement but nevertheless has become much more popular because of it.

While some CNET News.com readers said that Viacom is making a business mistake, others wondered what took so long for a copyright lawsuit to get here.

"I am in favor of user generated content but then there has got to be better way of monitoring and sharing it without copyright problems," one reader wrote to the News.com Talkback forum.

Tech meets art meets music at SXSWi
Keynote speakers at this year's South by Southwest Interactive Festival (SXSWi) in Austin, Texas, now in its 14th year, included two hackers, a veteran journalist, a creator of virtual worlds, and a director.

found their cell phones not working, and for once, it wasn't their carrier's fault.

As part of their demonstration on a new Golden Age of hacking, Make magazine senior editor Phil Torrone and do-it-yourself electronics pioneer Limor Fried, jammed the audience's cell phone signals during their keynote speech at SXSWi. In addition to the jamming technology, Torrone and Fried discussed and illustrated several of their

Dan Rather, the longtime news anchor who had his career prematurely shortened after bloggers drew attention to a reporting error on President Bush's National Guard service, was also a keynote speaker at SXSWi.

Rather, who has working with Internet entrepreneur Mark Cuban's HDNet, touched on the state of the Internet as a way to get information and news to people. The born-again cyberjournalist offered his views on how journalism is evolving in the digital era and the challenges facing his profession.

, known for his day-in-the-life-of films, discussed how he has snuck in "art" despite the confines of tight-fisted production houses.

And Will Wright, the renowned game designer of The Sims and SimCity fame, showed off Electronic Arts' forthcoming Spore. Wright explained that the game--which is expected sometime in the second half of 2007--is akin to a very elaborate Montessori toy. He said that because of the scientific theories it is based on and because the game is designed, to some extent, to predict what would make the game world more interesting, it is in fact an elaborate philosophy tool.

Wright showed how artificial societies in Spore can be quickly turned into representations of human behavior, including the ability to change climates. He showed how quickly raising the temperature of an area on a planet, could make seas recede or even disappear and joked that his game could be a sequel to the Al Gore documentary, An Inconvenient Truth.

One of the most notable debuts at SXSWi was Slacker, a new Web music service and portable music player from the San Diego-based company of the same name.

Slacker combines a standard portable music player, that supports MP3, WMA, WMV and MPEG-4 files, with Wi-Fi and a satellite radio service offering more than 10,000 custom music channels users can tailor to their tastes. The end result is essentially portable radio with video instead of audio ads--or, for a price, no ads at all--with content that refreshes automatically based on personal preference.

Slacker's player and radio service is built around the company's own proprietary technology that takes advantage of unused commercial satellite signals to send data. The "personal radio" is based on the idea that a majority of music player owners don't make the time to organize or update their music collections (hence, the "slacker" moniker).

Behind Microsoft's Tellme deal
Microsoft announced Wednesday that it is buying privately held speech recognition maker Tellme Networks in a deal believed to be in the range of $800 million.

With the Tellme deal, Microsoft gains a company with deep expertise in speech recognition and the intersection of voice and data.

Although Tellme will become part of Microsoft's business software division led by its president, Jeff Raikes, Microsoft also plans to tap the technology to bolster its competition against Google, as well as others in the mobile sector.

Much of Tellme's recent work has focused on mobile devices. Raikes and Tellme CEO Mike McCue on Wednesday talked up fundamental changes that speech recognition could bring to the telephone, a device that has changed relatively little in decades.

In addition to directly operating a voice portal for consumers, Tellme's technology is used by large companies such as FedEx, American Airlines and American Express to power their automated telephone systems. Half of all directory assistance calls are made using Tellme's technology, meaning that one in three Americans use its technology each year, according to Raikes and McCue.

Microsoft could incorporate Tellme's technology in unifying business telephony and e-mail systems, or adding speech technology to existing software to bulking up its Live Search for mobile phones. The company said it will build a platform on which other developers will be able to build speech-based applications.

Mountain View, Calif.-based Tellme, which has 320 employees, is profitable and has raised more than $230 million through several rounds of venture capital, the last of which came in October 2000. It was seen as a potential target for an initial public offering last year, though it never ended up filing for a stock sale.

Microsoft said that it expects Tellme's executives and staff to join Microsoft following the deal's close and added that it plans to maintain Tellme's existing services.

CNET News.com also got the story on the unusual circumstances of the Tellme negotiations, which took place only a few hours before kickoff on Super Bowl Sunday. Although both companies had invested plenty in speech recognition, the market was heading in new directions and neither company had all the technology it needed. The deal wouldn't be finalized for another five weeks, but McCue left the meeting convinced that being part of Microsoft was a better option than trying to take his company public or linking up with another large company such as Google.

Also of note
announced Vuguru, an independent studio for the production and distribution of online video content...Cisco Systems revealed that it will acquire WebEx, a Web conferencing company, for $3.2 billion...The Department of Transportation and the National Institute of Standards and Technology put a moratorium on Vista platform computers connecting to its networks, citing a fear of compatibility problems and unexplored security issues as the main reasons...A California judge dismissed charges against former Hewlett-Packard Chairman Patricia Dunn in the HP spying scandal, while the three other HP defendants pleaded no contest to a count of fraudulent wire communications and got community service.