With the YouTube acquisition fresh under his belt, Googles' CEO Eric Schmidt almost immediately got together with News Corp. (NWS)executives to try to smooth over any problems that might have come about from the deal. The meeting included Rupert Murdoch and Peter Chernin.
With News Corp.'s recent deal with Google (GOOG) for $900 million for search and advertising on the site, they want to make sure that a sense of partnership remains, rather than being competitors.
"Someone familiar with Google’s position said the company’s executives were going to LA to ensure that “lines of communication” remained open with News Corp and that there was a “forum” for the two companies to discuss their differences."
There is something else in the deal that hasn't been talked about a lot yet: Tons of people on MySpace link to YouTube. If problems aren't worked out, the links could be stopped and a huge drop occur in YouTube traffic. News Corp. actually has an upper hand here.
There's another bigger reason though: Rupert Murdoch. Anybody that knows the business understands that there are very few people in the world that can outdeal or outsmart Murdoch. And with YouTube owners lying to him about the company being on the selling block, he can't be too happy.
If Murdoch were to decide to compete against Google and YouTube at this stage, they would be in for the fight of their lives. Schmidt knows that. The fact that Schmidt went to News Corp. shows the very real concerns he has over the situation. This is probably more important in the strategy of Google than anything else it will face.
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