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Some companies you don’t want to mess around with. It’s one thing for the media conglomerate Viacom to sue Google for a billion dollars over YouTube, but it’s another when a television company owned by the Prime Minister of Italy files a lawsuit. Such is the case with Mediaset SpA, Prime Minister Silvio Berlusconi’s television company. Might we have an international incident on our hands?

The suit, which has Mediaset seeking “at least” 500 million euros (about $779 million), charges that YouTube has participated in the illegal distribution and commercial use of its content, according to Bloomberg. Specifically, the company did some digging on June 10 and found over 325 hours of Mediaset footage on YouTube in nearly 5,000 video clips.

While it’s not anywhere near the 160,000 unauthorized clips that Viacom is suing YouTube for hosting, it is quite a bit of illegal footage. And when you have the leader of a powerful nation leading the charge, it’s going to be taken very seriously.

While certainly Mediaset would seem to have grounds for this lawsuit, it doesn’t address a larger issue, which is: How much does YouTube really take away from traditional broadcasting? Provided it’s not an entire episode of a television broadcast, I’m of the mindset that YouTube works as more of a promotional tool for much of the content on it. Some Hollywood studios are starting to agree as we’re seeing deals like the one between Lions Gate and YouTube.

Mediaset claims that because of the clips being available online, it lost 315,672 broadcasting days. We all know that isn’t true. I don’t think I’m really going out on a limb in saying that most of the people who saw the clips online probably wouldn’t have been watching were it not there.

Also not exactly true is YouTube’s statement on the matter:

“YouTube respects copyright holders and takes copyright issues very seriously. There is no need for legal action and all the associated costs. We prohibit users from uploading infringing material, and we cooperate with all copyright holders to identify and promptly remove infringing content as soon as we are officially notified.”

If it were, Mediaset wouldn’t have found those clips.

The point is that YouTube and these media companies need to start figuring out how to work with one another. If all the conglomerates start suing Google and force them to shut down YouTube, users will be up in arms — and then they’ll move on to whatever the second biggest video sharing site is and start uploading illegal clips there.

And that next company might not be a potentially attractive promotional ally like Google.

[photo: flickr/alessio85]

If you watched a YouTube video that may have been pirated, don’t worry, you’re safe from getting sued. Google will obscure the names of YouTube users and the unique internet addresses of their computers when it follows an existing court ruling and hands a massive amount of user data over to Viacom.

Viacom originally won access to this data as part of its plan to confidentially investigate whether or not its video and music content is being pirated by YouTube users.

“We are pleased to report that Viacom, MTV and other litigants have backed off their original demand for all users’ viewing histories and we will not be providing that information,” a YouTube blog post explains.

Viacom previously said that the “personally identifiable information that YouTube collects from its users will be stripped from the data before it is transferred to Viacom,” and that it “will use the data exclusively for the purpose of proving our case against You Tube and Google.” While the company did originally ask for the user data in question, it apparently didn’t actually care.

Many people have feared that Viacom would try to gain user data in order to prosecute individuals for doing things like uploading pirated music videos.

It’s not clear if Viacom didn’t really care about user data, in the first place, or if the Google legal team and intense negative publicity prompted the company to back down. In any case we can all go back to watching YouTube videos now, like the hilarious one, above.

Here’s the latest action:

More fallout from the YouTube/Viacom lawsuit — After a judge ruled that Google wouldn’t have to reveal YouTube’s source code but would have to open its user data for all to see, the Electronic Frontier Foundation (EFF) wrote a post condemning the decision as a violation of privacy. Google lawyers are also on the case, according to The Wall Street Journal. The outcry in the blogosphere has been even bigger.

Chicken Little, the SSD-based MacBook Air prices are falling — Apple has quietly shaved $500 off the price of it’s slim MacBook Air drive with a built-in solid state drive (SSD). These are the drives that use flash memory and require no moving parts, allowing them to be more stable and in some cases much quicker. You can now get one for $2,398, according to AppleInsider.

Economic downturn hits Google? — The search giant is closing two of its offices, one in Denver and one in Dallas. Luckily, no Googlers are being laid off, they all have the option to be relocated, according to Google Blogoscoped

Activision-Vivendi Games merger likely to proceed next week — A judge has denied a request to halt the previously announced $18.9 billion deal. July 9 could be the close date, according to GameSpot.

Report: Baidu enters mobile search deal with Nokia — The largest Chinese search engine has a deal in place to pre-load its product onto Nokia phones, according to Forbes. Nokia recently bought the Symbian OS and announced it would open it in an effort to compete with the likes of Google’s upcoming Android platform. Now it has a mobile search partner besides Google as well.

Segway sales rising as gas prices do the same — Remember the Segway? Of course you do. Know anyone who owns one? Probably not. That may change soon as sales are on the rise with many people looking for alternatives to cars, according to USA Today.

Aussies living the tech lifestyle in San Francisco — The San Francisco headquarters of advertising agency Euro RSCG provides startups from Australia with office space, desks, broadband access and a telephone line on the cheap (around $600 a month), according to The Age. The idea is to help Australian companies better serve their American and Canadian customers, which often make up a large percentage of their user base.

Apple developing a whole multi-touch language — A new patent, uncovered by UnwiredView, reveals a wide range of gestures beyond the “pinch” and the “double tap.” The patent is called “gesture learning,” and interestingly it only shows left-handed gestures. A separate report says Apple has filed for 34 different multi-touch patents.

The CEO of I Can Has Cheezburger? is allergic to cats — Yep. Cats are a source of great income, but also a source of great pain, according to Valleywag.

A new independent game development studio, Meteor Games, launched today with Adam Powell and Donna Williams at the helm — the two entrepreneurs who previously launched game company Neopets back in 1999 and then sold it to Viacom’s MTV Networks for $160 million.

The new company is working on a fantasy/sci-fi massively multiplayer online game — a stylistically animated world for children ages 8 to 18 in 2009. That age group is well above the target for Neopets (which has more than 45 million users).

“There is a gap between games like [Funcom's] ‘Age of Conan‘ and [Disney's] ‘Club Penguin,’” said Powell. And that’s exactly the gap he plans to focus on.

It’s certainly harder to start a new MMO today than it was back in 1999. There are dozens of companies trying to challenge Blizzard’s “World of Warcraft,” which has 10 million paying subscribers. Gaia Online, which described its own MMO today, will be more direct competition in the MMO space, though Meteor Games is going to shoot for higher graphics fidelity than Gaia Online, which could help the new company set itself apart. Runescape is another casual fantasy MMO that targets a younger crowd, though that game also appeals to a variety of ages.

There aren’t many serial entrepreneurs in the virtual world category because it’s really hard to come up with a hit in the first place. But if you’re going to bet on anyone to come up with an encore, Powell and Williams are a good choice.

Powell and Williams probably sold off Neopets too early, considering Disney has since acquired rival Club Penguin for $700 million. But the money they did get was enough to allow Powell and Williams to bankroll their new game so far. They waited to start their game because they had a no-compete clause with Viacom. After that expired, and after they figured out what they wanted to do, they started their new company. In the meantime, they were obsessively playing “World of Warcraft,” creating a dozen “level 70″ characters between them. (That means they poured a ton of hours into their, um, game research.)

They have 42 employees in their West Hollywood, Calif. studio. Powell is chief executive and chief creative officer, while Williams is president and chief operating officer. Powell said they are talking to possible investors now but are under no pressure to publish their game by a certain deadline.

The new game won’t be a simple Adobe Flash-based application played in a web browser (like Neopets and other simple MMO sites). Powell said he looked at the competition in that area and wanted to have much better graphics. Meteor has licensed a 3-D game engine to build the graphics for the world but won’t yet disclose the engine maker. The company will publish the game on its own site.

Meteor will likely have a free version to entice gamers and charge $5 to $10 a month for access to the full world. The company will likely also create a virtual goods model where it can charge for certain items. Williams said the world will combine an MMO, casual game play, and social networking.

It’s a little late from the point of view of its rivals, but Paramount Pictures has finally decided to take a plunge into video games.

The Hollywood studio is expanding its video game division with a slate of games that will start coming out later this year, according to Variety.

Most movie studios have seen why this makes financial sense. A movie might cost $90 million to make and gross $100 million. But a video game costs $30 million at the most and can still generate $100 million. For a few years now, video game console hardware and software sales have trumped movie box office receipts. (Yes, we know that games cost $50 or $60, and movies about $10).

Warner Bros. has expanded its presence in games under well-known developer Jason Hall and Disney is spending hundreds of millions of dollars on its own video game expansion. Sony, of course, has had both a motion picture and video game business for years.

Variety says that Paramount wants to invest in all types of games but is particularly interested in casual, handheld and mobile games. As we’ve reported, these are some of the hottest areas for start-ups these days. The rest of Viacom, which owns Paramount, is also active in video games. The MTV division owns Harmonix, creator of the hit game Rock Band. MTV also has a deal with famous Hollywood producer Jerry Bruckheimer to make a series of video games. Viacom chief Sumner Redstone has also had an investment in Midway Games, which recently named a new CEO, for some time.

What else could Paramount be working on? Well, this reminds me of Star Trek Online, a massively multiplayer online game that has been in the works for a while. Read the rest of this entry »

Here’s the latest (updated) action:
1) Kyte.tv raises $15 million
2) Electric Sheep Company lays off 22
3) FCC receives 700MHz auction applications
4) Microsoft signs $500M ad deal
5) GPS devices fly off the shelves
6) Netsuite sets high price for planned IPO
7) Eric Eldon, celebrity at large?

Kyte.tv raises $15M second round — An online startup that offers a video player allowing near-live communications by video, photo and chat, Kyte has picked up some steam online, attracting a decent-sized audience and celebrities like 50 Cent to its service. The $15 million second round was provided by Telefonica, Nokia, DoCoMo, Swisscom, Holtzbrinck and Draper Fisher Jurvetson, according to Robert Scoble. Quite a hefty amount, in comparison to the $2 million investment into live streaming video company, Ustream that we reported in yesterday’s roundup. However, Kyte still has some work to do in competing against newer, sharper-looking rivals like Qik, which says it can stream live video straight from your phone, something Kyte doesn’t quite do (though is working on).

Electric Sheep Company lays off 22 employees — It’s time to cull some lambs from the fold for the Electric Sheep Company, which builds software that third-party companies can add to virtual worlds Second Life. It had planned to build an ad network within these worlds. Instead, it has cut almost a third of its workforce, and is giving up on the ad plans for now. It plans to branch out beyond Second Life to worlds like Metaplace (our coverage). More details are at ClickZ News.

FCC receives applications for 700MHz auctions — More than two hundred applications were filed to bid on the upcoming Federal Communications Commission auction for the 700 Megahertz wireless spectrum, planned to begin January 24th. Although some applicants must correct and finalize their applications, the list contains some notable names — Google, of course, but also Microsoft co-founder Paul Allen’s venture firm Vulcan Capital, and startups like Frontline Wireless (expected). Check out the lists of finished and unfinished applicants yourself for more.

Microsoft signs $500M ad deal with Viacom – Taking a first step toward becoming a viable competitor to Google in the online ad market, Microsoft signed a deal with Viacom that it says is worth about $500 million, over a contract period of five years. Google, in turn, immediately claimed that the deal is proof that Federal anti-trust watchdogs should allow its merger with DoubleClick to go through. Microsoft may well be kicking itself, because as Bloomberg reports, the Federal Trade Commission will likely approve the Google-DoubleClick merger this month (although it must also find approval with European regulators).

NetSuite sets high price for planned IPO — First the expected range for NetSuite’s initial public offering was $13 to $16, then underwriters boosted it to $19 to $22. Now the final price has been set at $26, almost double the original range. That means that Larry Ellison, the billionaire CEO of Oracle whose family owns over 70 percent of the company, will make out like a bandit. NetSuite, of course, is a competitor to Salesforce, whose own stellar performance on the markets likely helped improve NetSuite’s outlook. Ellison was also at one time an early investor in Salesforce, which is now run by a former employee of his, Marc Benioff.

GPS devices becoming cheaper, more ubiquitous — Many GPS devices have dropped below $100, and even the better units often retail for little more than $200. Sales of the devices at local malls are through the roof, according to Dean Takahashi. Cell phones, likewise, are providing an ever-cheaper way to find your way around. Excellent news for the dozens of startups that have sprung up offering to show you the way to the nearest store, friend or event — now the question is, which will come out on top?

VentureBeat’s own Eric Eldon becomes a celebrity — Admittedly, those are the words of Speedddate.com, a dating startup that ran a session with eight “celebrity bloggers.” We (or he) will take the compliment. Way to end those lonely nights of blogging, Eric.

South Park creators Trey Parker and Matt Stone have signed a revenue-sharing deal with executives at Viacom-owned Comedy Central, their long-time television network, according to a New York Times article on Sunday.

This continues a shake-up in the way big-media works, the latest in a trend giving more power to artists — and less to the big media companies, as we wrote last week. Normally, television owners keep revenues, and separately negotiate payment with artists. In their deal, Parker and Stone get a cut of the proceeds from wherever the show appears — be it on the net, mobile platforms or video games.

South Park is popular for skewering celebrities and status quo ideas. It has spread virally over the internet without Viacom getting paid — most famously through free, full-length episodes. The show’s libertarian creators have said they are in favor of free downloads of episodes because it helps more people watch the show– which of course is contradicted by this latest deal.

It is a deal both parties describe as “attempting to leapfrog to the vanguard of Hollywood’s transition into Web.” Or, as South Park’s lawyer said, a demonstration to new video-entertainment start-ups (think YouTube et al.) that they’ll have to pay premiums for top content creators.

Parker and Stone originally retained the rights to a percentage of revenue brought in by non-cable distribution channels — the web, mobile devices and video games — due to a subtle clause signed as part of a contract renewal between the parties during the dot-com bust years.

The caustic duo are guaranteed advances from profits on merchandise, DVDs, international sales and methods of syndication. The agreement will also include a talent studio called SouthParkStudios.com. The deal is worth $75 million to the two creators over the next four years, the article says; the show has already made hundreds of millions for Viacom.

Doug Herzog, president of MTV, was realistic:

“The landscape has shifted dramatically,” Herzog said. “The way of the Web seems to be, there’s a very low barrier to entry, so you don’t need, necessarily, a major media company to be in business, or a movie studio, or whatever it is - you just need to be able to set up shop and go. You’re seeing a lot of guys doing this, funnyordie.com being the best example.” (Funnyordie.com was started this year by the comic actor Will Ferrell and his production partner, Adam McKay.)

Internet TV company Joost has raised $45 million in a whopper round of venture financing, giving it a significant war-chest to spend just as its product hits the market.

Lead investors were Sequoia Capital and Index Ventures. CBS Corporation, Viacom and the foundation of Chinese billionaire Li Ka-shing also participated, according to the company, in a statement to VentureBeat Wednesday evening.

Despite being relatively untested, Joost has gained publicity because it was started by Skype co-founders Janus Friis and Niklas Zennström. It has signed deals with several companies, including Viacom, CBS and Time Warner, to carry their content. Some reviewers have been less that excited about the product, however. VentureBeat has received an invitation to review the product, which is still in testing mode, but we have not yet tried it.

It is the first reported round of outside funding for the company.

Index also backed Skype, which used a peer-to-peer technology for phones that Joost is now using for TV. The question now is whether Joost can use its publicity momentum — and now, impressive funding — to take on folks like BitTorrent, which has been playing with peer-to-peer video for sometime, and numerous other Internet TV start-ups. Some competitors, such as Akimbo, are struggling, pitching things like set-top products that are more expensive than the near-free peer-to-peer technology offered by Joost.

Roelof Botha, general partner at Sequoia Capital, led the firm’s investment in Joost. He was also the lead investor in YouTube, a short-length video site — different from Joost, which wants to show full-length video.

Delivery Agent, a company that lets you purchase products you see on your favorite TV shows, has won a major deal with Viacom and raised $18.5M in a third round of funding.

If you like the jeans that Meredith was wearing in the latest episode of Grey’s Anatomy, you can go to Delivery Agent and buy them immediately. It’s the latest way media companies are seeking to use new interactive technologies to squeeze value from product placements in movies, television shows and now – they hope – online videos. The Viacom deal gives Delivery Agent, of San Francisco, four years of exclusive access to the product placement data from Viacom’s MTV, VH1, CMT, and Logo networks.

The financing round was led by Bessemer Venture Partners and included WorldView Technology Partners and Cardinal Venture Capital. All three had participated in Delivery Agent’s previous $11.5M round. Total invested to date is $35M.

Delivery Agent’s service helps TV or movie producers create an index of products appearing in their movies and shows. The index then becomes accessible on Delivery Agent’s retail site, SeenOn.

You can find and buy practically everything any major character wore on any episode this season on a list of shows from NBC, ABC, E!, Bravo, and others. To buy Meredith’s jeans, for example, you go to SeenOn.com and select ABC and Grey’s Anatomy from a list of networks and their shows. You then can browse by character (Meredith) and episode (“Desire”), and select the jeans from the displayed results (see screen shot below).

The Viacom endorsement gives Delivery Agent a stamp of credibility as it competes against Entertainment Media Works, which raised $4M earlier this year, and operates StarStyle.com, a direct competitor to SeenOn.

Delivery Agent also wants to sell you this stuff at the moment you see it. To do this, Delivery Agent has developed a proprietary video player that synchronously highlights products as they appear on the screen.

To get a taste of this, take a look at this “Shopisode” trailer for Jackass 2. As the video plays, product advertisements pop up on the right hand side. The ads show the product, its name and its brand logo. In the course of the eighty second trailer, eleven products pop up, ranging from Snapple to Speedo. For now, this functionality is only available in Delivery Agent’s Shopisode video player, but the company foresees a future in which any major network or movie studio will be able to plug-in and make their online videos “shoppable.”

If this sounds terrifying, you might have to get used to it – or just go without watching commercial video on the web. Most people are aware that when they watch 24 and see Macintosh computers throughout C.T.U., it’s likely that Apple has paid for this experience. With technology like the Shopisode player at their disposal, it becomes plausible for advertisers and content producers to place products in every nook they can find.

Delivery Agent will first target “hardcore consumers” who they think will watch a show once for the content and a second time to shop for the products they saw. For this to take off, however, video content producers will have to train their audiences to accept a different breed of advertising that is intrusive in a whole new way. But with these producers fed up with the commercial-bypassing power of DVR and the advertising market scrambling to find some brilliant way to monetize online video, Delivery Agent may offer one method for the two parties to align.

Here’s the latest action:

Big names support Frontline Wireless, which wants to end-run carriers — James Barksdale, former chief executive of Netscape (left, top), and John Doerr, a big-name venture capitalist with Kleiner Perkins (left, bottom), are the latest to back Frontline Wireless, the company we wrote about last month, which wants to bid for radio spectrum dedicated for public safety but which can also be used for profitable wireless offerings.

The long-wave spectrum will support wireless Internet devices, and spectrum ownership is a great way to bypass dealing with the monolithic carriers. Ram Shriram, an early investor in Google is already a backer. Vanu Bose, an entrepreneur and technologist, is also investing, according to the story in the NYT. Fact check: NYT calls Barksdale a Silicon Valley investor, but he isn’t based here. No word yet, though, on whether Google will invest. (Update: Doerr’s investment is on behalf of Kleiner Perkins, we’ve confirmed.)

Breitbart latest news site with traffic — We’re hearing that Breitbart, a news aggregator, got 22 million page views last month, simply by amassing news stories from wire services like Reuters, AP, and by getting an early look at stories posted to press release services (by paying them). Readers come to the Breitbart, click on stories, and Breitbart shares ad revenue with the original sources of news (AP, etc). We’ve contacted Breitbart to contact the traffic numbers. Note: While Google is getting sued from folks like AFP, and being pushed into licensing deals with CBS, Breitbart’s model is to say upfront it will sign the licensing deal.

Maxthon browser gets investment from Google — Maxthon, the browser company headquartered in Israel, has reportedly sold a minority stake to Google for $1 million (Techcrunch). Maxthon, has been catching on in China, in part because of its ability to circumvent Chinese censors. The investment is apparently part of a “strategic deal” that would make Google the browser’s default search engine. Maxthon has just crossed 80 million downloads of its browser, and reports that more than half its 14 million unique monthly users are in China. That’s excellent growth for such a young company, but it has slowed form the rapid pace last year, when Maxthon got five million new downloads a month for a period. And why only 14M uniques, when you’ve had 80M downloads? The company got $5 million from CRV, and seed money from Morten Lund and WI Harper in 2005. Reached by VB, chief executive Netanel Jacobsson declined comment.

Clipmarks releases tool to search what people are clipped — We’ve mentioned Clipmarks before (VentureBeat coverage), a service that lets you clip material from Web pages. It has now released Clipsearch, a way to search what others are clipping, and ranks the clips by popularity.

Krugle and SourceForge partner — Now you can search code on SourceForge, with the code search engine Krugle.

Yahoo signs deal with Viacom — This is the season of major ad deals. Google’s size and momentum brings it most of the publicity. But it has alienated some, including Viacom, which has sued Google for not aggressively filtering for pirated content on its video site, YouTube. Now, Viacom has signed a deal with Yahoo, which makes Yahoo the exclusive provider of search ads at MTV.com, Nickelodeon.com and other sites run Viacom.

Salesforce.com acquires Koral, a document management start-up — Salesforce.com, of San Francisco, will use nine-person San Mateo’s Koral’s technology in a new service to let customers’ employees find and manage documents and other content. The service, Apex Content, lets people collaborate on applications using documents such as video, email, HTML and other office documents. More detailed coverage here. Remember, Koral is the site run by Mark Suster (pictured left), who got pissed off last year when venture capitalists used their Blackberry during a meeting. He ended up getting seed funding. Maybe that’s good. Had he taken VC, he may have been forced to hold out for a bigger deal. We don’t know. See Suster’s blog. Anyway, the Salesforce M&A guys probably weren’t using Blackberrys during the talks.

Here’s the latest action:

Amazon’s odd and scary patent — First, Amazon rolled out a product called Mechancial Turk (image left), where people do tasks for you that a machine couldn’t perform. Strange name, we thought, but nicely couched in history, and the people still ruled. But the latest Amazon patent puts the machine in charge, breaking down tasks, and commanding the human to do them. According to the patent, just awarded, “the humans perform the subtasks and provide the results back to the server.” Note that the inventors are the guys who have since left Amazon and launched Kosmix, a search engine.

Steve Jobs: Great artists steal — We can’t confirm this yet, but h Here’s a statement reportedly made by Apple’s Steve Jobs. The transcript is on PBS, and the edited version of the video is still at YouTube (see below), and emphasis is ours: “…I mean Picasso had a saying, he said good artists copy, great artists steal. And we have always been shameless about stealing great ideas and I think part of what made the Macintosh great was that the people working on it were musicians and poets and artists and zoologists and historians who also happened to be the best computer scientists in the world.” This airing of this again is notable, of course, because Apple is also in the midst of sparking a revolution in music copyright, prodding the removal of digital rights from its iTunes offerings — and music labels are sensitive about their music getting ripped off. The original video, meanwhile, has been ordered down. (Udpate: This is apparently a well-known quote by Jobs, as pointed out in comments below, so perhaps only relevant in the context of the take-down order).

Viacom vidoes represent just two percent of views on YouTube — Viacom, the large music and video publisher, sued Google for $1 billion for hosting pirated video on its video property, YouTube. But only two percent of views had Viacom-owned music or video, according to a report. That’s more than the other labels and studios, though. See summary by Henry Blodget.

Topix, the news site, opens up to citizen journalists — Topix has been working on local news for a long time, and yesterday opened itself up for citizens to post and edit stories. Question is, why did it take so long? Chief executive Rich Skrenta explains some of this on his blog. Also, note Topix is partly funded by USA Today parent Gannett, McClatchy and Tribune, and so was trying to serve those masters, and lost focus on its own survival. Meantime, though, several other such sites (Newsvine, Backfence, NowPublic, Outside.in etc) have emerged and make Topix a little late to the game. Helps to have your partial owner, USA Today, the nation’s largest newspaper, announce the news, though.

Something fishy with Technorati traffic? — Odd that Technorati, the search engine for blog material, suddenly announces a spike in traffic as rumors circulate it is searching for a new chief executive. Chief exec David Sifry provides the latest details on traffic: Nine million unique visitors over the last thirty days, up from 3.5 million two months ago. At first, we wondered whether the company had hit the wall, and was looking for publicity as it searches for a sale, or a new round of funding. This comes after we stopped using Technorati for blog searches last year — with the emergence of blog material in other engines such as Google. To be fair, though, others are asking the same question, and hearing that Technorati has simply gotten better. Any thoughts?

MySpace ad revenue disappointing? — The giant social networking site will only make $271 million in ad revenue, says one Wall St. analyst, even though Google was supposed to pay a minimum of $300 million to sell ads on the site!

Capital gains tax on VCs — Venture capitalist Fred Wilson has an good analysis on the debate about the VC tax proposal being weighed in Washington. He criticizes a NYT editorial, which argues the capital gains benefit is excessive. Wilson’s point is that the earlier the stage of investment, the greater the risk, and thus the more justified the tax benefit. Should private equity firms, which invest very late, and take on less risk, enjoy the low taxes they get? Maybe not. But if you tinker too much with VC taxes, the better VCs will leave the industry and become angel investors. The Europeans would love it. They’ve been trying to figure out how to get a vibrant VC industry, and a weaker U.S. industry might push more money over there.

As usual, see latest deals — See our VentureBeat Newswire here.

SustainLane gets $3.5 million for sustainable living site — The funding for the San Francisco company is its second round, according to a regulatory filing cited by PE Week. It ranks US cities by how environmentally friendly they are, and provides animated media about people trying to live green and reviews of eco-products.

FatDoor, secretive social network, to launch soon — The Palo Alto-based start-up, backed by Bill Harris, former CEO of Paypal and Intuit, and Bertram Capital, launches April 15, and describes itself as “a wikipedia of people,” with over 130 million people and business profiles at launch. It wants to let you get to know your neighbors, with “…..search and groups based on pre-seeded politics, religion, ethnicity, age, interests, etc.” The site features “three-dimensional geo-spatial visualization of data” and user-generated community publications and “geo-spatial coupons.” Stay tuned

Viacom, the giant owner of video content, has sued YouTube and Google for “massive intentional copyright infringement” of Viacom’s properties.

It is one of the biggest challenges yet to what content owners say is a foot-dragging policy by Google when it comes to respecting copyrights.

The suit seeks more than $1 billion in damages, as well as an injunction prohibiting Google and its property, YouTube, from further copyright infringement. The complaint says almost 160,000 unauthorized clips of Viacom’s programming have been available on YouTube and that these clips had been viewed more than 1.5 billion times.

The suit is significant because it puts significant pressure on Google to either comply quickly or fight the challenge in court. By fighting, Google could argue that YouTube’s current policy, of taking down video only after it gets complaints from owners, is compatible with the law.

Viacom continues to strike deals with other players, such as Joost, to allow them to license Viacom’s content. Google has said it will soon introduce filtering technology to avoid pirated videos from being submitted at YouTube, but it has yet to do so.

The longer it waits, the bigger YouTube’s lead appears to get in the video sharing industry.

YouTube will start filtering videos and other content in order to stop pirated material from being posted to it site, reports the Mercury News’ Elise Ackerman.

The news is significant because the entire music and video industry has been up in arms about YouTube’s slowness to implement filtering.

YouTube’s parent, Google, will use technology from Los Gatos, Calif.’s Audible Magic, the same technology that MySpace is offering media companies to check whether for their copyrighted material that is being posted at MySpace without their permission.

VentureBeat hasn’t been able to confirm any of this.

This is strange because Google earlier had delayed implementation of filtering at YouTube with the suggestion that it was building its own technology — delays that have made media groups like Viacom and News Corp angrier. Our question is: Why now?

Viacom, owner of a vast stable of videos, has requested that YouTube remove more than 100,000 unauthorized video clips from its site.

This comes after months of negotiation between Google and other entertainment content owners like Viacom. Story here, by Merc’s Elise Ackerman.

“It has become clear that YouTube is unwilling to come to a fair market agreement that would make Viacom content available to YouTube users,” the entertainment giant said in a statement. “Filtering tools promised repeatedly by YouTube and Google have not been put in place, and they continue to host and stream vast amounts of unauthorized video.”

Google has indeed been stalling on implementing copyright filter tools, saying it is building its own filter technology. But that has only helped its new property, YouTube, keep its lead as a place you can find all kinds of video, including copyrighted stuff. Lawsuit coming?