March 13 – Viacom announced today that it has filed suit against YouTube, and its parent company Google, for massive intentional copyright infringement. Viacom is seeking one billion dollars in compensation for supposed lost revenue and an injunction against any further infringements on the part of YouTube and Google.

Viacom, with a current market value of 24.99 billion dollars, is the media conglomerate behind numerous television networks and movie production houses, such as the MTV Networks, Paramount Pictures and DreamWorks movie studios. Considering what they own, it should come as little surprise that they are the copyrights holders to an extremely vast array of content, a lot of which has found its way onto YouTube.

Google recently spent 1.56 billion of its current 98.98 billion dollar market value to acquire the popular video sharing site YouTube. This acquisition might have made sense to Google at the time considering that the majority of Google’s annual earnings stem from targeted advertisements. The best way to make money via advertising is to get as much traffic as possible to the sites that host the ads, and YouTube arguably has the largest userbase of gullible, ready-to-click-anything teenage visitors of any site, save for MySpace perhaps.

While Google may have adhered to its philosophy of doing no evil, it may very well have inadvertently purchased a massive, multi-billion dollar thorn in its side. The biggest paradoxical problem that YouTube currently faces is that the site in not directly under Google’s control and that it is dependent upon its userbase for content and recurring visits. Most of the vital content that YouTube thrives upon is copyrighted and without it, YouTube would simply not be as successful as it currently is. In other words, if they were a hundred percent legit, they wouldn’t be as good.

In a press release related to the lawsuit, Viacom expresses their belief that “there is no question that YouTube and Google are continuing to take the fruit of [their] efforts without permission and destroying enormous value in the process.” While there may very well be a large element of truth to those allegations, it is also evident that Viacom is overlooking a critically beneficial aspect to the infringement of its TV shows and movies: YouTube is a magnificent promotional tool for televised Viacom content, and it’s completely free of charge.

Since YouTube does not allow the uploading of entire movies or television shows by significantly limiting the duration of clips, the uploading of short snippets of the actual show or movie poses little to no intrinsic threat to Viacom. If anything, seeing a short preview, if you will, of the full length content acts as a commercial and will most likely boost television ratings.

One, rather famous, example of this phenomena occurred back in December of 2005, when the Saturday Night Live skit “Lazy Sunday” made its way onto YouTube and instantly became a hit, garnering several million views in a matter of days. As soon as the presence of the skit on YouTube was brought to the attention of the promotionally-challenged upper echelon of NBC, the network didn’t think twice about unleashing its blood thirsty lawyers to have the clip removed. What NBC’s top guys failed to notice was that as a direct result of SNL’s exposure on YouTube the network suddenly saw a dramatic rise in the viewer numbers. NBC had essentially killed off the best free promotion that it had seen in years.

Since that debacle, there have been numerous studios and networks that have realized the power of the Internet in attracting new, young viewers, and they have made arrangements with YouTube to “leak” select content, hoping to win a few more eyeballs. In general, this strategy has worked quite well for those who realized what it was that interested YouTube visitors.

So, the whole question as to whether or not any significant damage was ever inflicted upon Viacom might get quite murky before any final judgments are made. If any damage was done, I doubt that it was anywhere near the tune of a billion dollars. In light of the lush market value that Google has, I think that it’s quite possible that Viacom just wants a share of the Google cake.