Well, that didn't take long. Just days after hearing of a YouTube rival being formed by media giants Viacom (NYSE:VIA), General Electric's (NYSE:GE) NBC, CBS (NYSE:CBS), and News Corp.'s (NYSE:NWS) Fox, one of the four horsemen is apparently leaving the stable.
Viacom apparently wants to go it alone, and I can't say I blame it. There were too many star chefs in that kitchen, and the music industry is a great gauge of the disastrous results that can occur when major entertainment companies join forces to give consumers what they think they want.
Ever since The Wall Street Journal broke the story of advanced negotiations between the four parties to take on Google's (NASDAQ:GOOG) popular viral video site, it just didn't make sense to me. Major media companies would never go for the consumer-policed democratization that is YouTube, and that's reason alone for consumers to stay away.
Viacom has too many properties that should be exploited the right way, and it had no reason to be digging into a chalk talk with its enemies.
"If the project goes forward with the remaining partners, it will likely be ill-conceived and constrained by political pressures that will spell its doom from the beginning," says Boston University professor James L. McQuivey. "As a result, YouTube can expect to maintain its dominant position at least until the next big thing comes up."
Amen, professor. The deal never made a whole lot of sense to begin with. Fox Interactive already has a viral video sharing hotbed in MySpace.com, while CBS and NBC are YouTube partners. NBC has even bankrolled some of YouTube's biggest sketch comedy stars like Nobody's Watching and Baratsand Bereta.
With Viacom out of the picture, the three remaining parties have no reason to fail in building a better mousetrap when they are either established online juggernauts or already feeding on the YouTube cheese.
Well done, broadcasters. You spared future business school students another corporate blunder case study.
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Longtime Fool contributor Rick Munarriz doesn't know if he still wants his MTV, but he knows that Viacom's shareholders wouldn't mind money for nothing. He does not own shares in any of the companies mentioned in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.
