Google abandoned [its deal with Yahoo] not because pressing ahead with it ‘risked’ a protracted legal battle, but because it guaranteed one.”

I wrote that on Nov. 6, following the official dissolution of Google’s (GOOG) proposed advertising partnership with Yahoo (YHOO). Turns out the guarantee to which I referred was an ironclad one. Sanford Litvack, the attorney who would have been lead counsel in the event of a government antitrust case against Google, tells American Lawyer Daily that the Department of Justice was literally hours away from suing the company when it bailed on the deal. “We were going to file the complaint at a certain time during the day,” he explains. “We told them we were going to file the complaint at that time of day. Three hours before, they told us they were abandoning the agreement.”

Had Google not turned tail, the DOJ would have charged it with violating Sections 1 and 2 of the Sherman Act. Said Litvack, “It would have ended up also alleging that Google had a monopoly and that [the advertising pact] would have furthered their monopoly.”

As I wrote back in November, “Internet search advertising and Internet search syndication are natural monopoly businesses. And, according to the DOJ, Google is their presiding monopolist.” Truer words, eh?

Working with Seth MacFarlane, creator of the “Family Guy” animated series, Google (GOOG) will in September begin distributing “Seth MacFarlane’s Cavalcade of Cartoon Comedy,” a series of digital shorts
to be embedded on Web sites as free, ad-supported streams.
About two minutes in length, the shorts–which MacFarlane describes as “animated versions of the one-frame cartoons you might see in The New Yorker, only edgier”–will be syndicated through Google’s AdSense advertising system, which will target them at MacFarlane-friendly segments of the Web. Some will be accompanied by standard pre- or post-roll ads, some by “brought to you by” tags, and others by original commercials created by MacFarlane.

The shorts are essentially like little Assisted Ad Delivery Devices, intelligently targeting advertisements at those receptive to viewing them. “We believe the revenue could be formidable,” said Karl Austen, a lawyer who worked on the deal. “What is exciting is that this is a way to monetize the Internet immediately. Instead of creating a Web site and hoping Seth’s fans find it, we are going to push the content to where people are already at.”

We do a good job of educating users about copyright law.”

–-YouTube CEO Chad Hurley, D5 Conference, 2007

I was very interested to hear Chad and Steve talking about educating consumers about copyright earlier today. Perhaps I’ve given them a graduate degree in copyright law.”

–Viacom CEO Philippe Dauman, D5 Conference, 2007

Google’s apparently finished “educating users about copyright law” and has moved on to the far more important business of making sure not to run afoul of it. After a year of delays and excuses, the company this morning uncrated an antipiracy system for its YouTube video-sharing site.

YouTube Video Identification, as Google colorfully identifies it, matches videos uploaded to YouTube against a repository of legitimate master videos provided by their owners. In the event of a violation, the system notifies the copyright holder, who can then request the video’s removal, its promotion or its ad-supported syndication. Yes, ad-supported syndication. “Like many of these other policies and tools, Video Identification goes above and beyond our legal responsibilities,” YouTube Project Manager David King explained. “It will help copyright holders identify their works on YouTube and choose what they want done with their videos: whether to block, promote, or even—if a copyright holder chooses to license their content to appear on the site—monetize their videos. In implementing this technology, we are committed to supporting new forms of original creativity, protecting fair use and providing a seamless user experience—all while we help rights owners easily manage their content.”

Ah. A “Don’t vaporize, monetize!” program (see “New From Google Labs: Google Big Friggin’ Video Ad”). Surely, just the sort of thing Viacom was hoping for when it filed that $1 billion copyright infringement suit/“mistake” against YouTube earlier this year. Well, it’s a step in the right direction, anyway. Said Viacom general counsel Mike Fricklas, “We’re delighted that Google appears to be stepping up to its responsibility and ending the practice of profiting from infringement.”

Time Warner spokesman Ed Adler offered similar sentiments. “We’re encouraged that they recognize the need to recognize copyright,” he told the Los Angeles Times. “I’m told by our general counsel that there’s still some work to be done before we would say it’s totally sufficient to protect copyright, but we’re encouraged so far.”

But not for long. Because Google’s system doesn’t prevent copyrighted content from being posted to YouTube, does it? But it may well prevent media companies from suing over it.