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YouTube's Miss Might Be Google's Loss

YouTube's failure to implement anti-piracy tools by the deadline may cause serious problems for Google, curtailing lucrative partnerships with media companies and turning Google's $1.65 billion acquisition of the video site into a lawsuit magnet, analysts say.

Despite repeated pledges in 2006 to deliver "by year end" content identification tools able to scan the 65,000 videos uploaded hourly for copyright violations, YouTube now won't specify when the software will be available.

"We are currently improving our content identification tools to help our partners more easily identify their content," Steve Chen, YouTube co-founder and CTO, said in a statement referring to Universal Music Group and Warner Music Group.

Chen said YouTube is adding technology from Google to the content filters.

In September, YouTube described its content-identification tools as "automated audio identification technology" able to locate copyrighted material within uploaded videos, as well as improve revenue for content providers.

Social-networking giant MySpace last year licensed a similar audio fingerprinting technology from GraceNote able to screen music uploaded by users.

Automated filters would replace the current system, which depends on the copyright holder to notify YouTube of offending videos. Thousands of new videos pour into YouTube each hour, making the process impractical, analysts say.

Without some automated process to detect infringing content, Google faces a spate of lawsuits, Yankee Group media analyst Michael Goodman predicts.

"YouTube has been built upon piracy," he added. If protections aren't provided soon, the video service "would be hit by lawsuits so fast it would make their heads spin," he said.

Last year's content distribution agreements were predicated on the anti-piracy measures YouTube promised, Gartner's Mike McGuire said. Without it, studios will hesitate. McGuire said YouTube has two weeks to introduce anti-piracy software before partners begin losing confidence.

"It will be a much more acrimonious atmosphere to work in," Goodman said. Content might be limited to short clips.

Possible lawsuits were on Google's mind when the search company told the SEC in November its acquisition of YouTube could subject it to copyright lawsuits. Google CEO Eric Schmidt denied it had created a slush fund to pay for potential lawsuits.

And lawsuits did follow.

Following its October distribution agreement with Universal Music Group, Universal filed infringement charges against two other video-sharing sites. Fox's MySpace, despite licensing audio-fingerprinting technology to screen uploaded music, was also sued.

Google's policy of removing offending videos only after copyright owners complain earned it a stern warning by Japan's Society for Rights of Authors, Composers and Publishers (JASRAC). YouTube previously removed 30,000 videos that JASRAC said infringed on copyrights.

YouTube ended the year being charged with infringement over a French documentary and a content agreement with the National Hockey League.