Revealing docs emerge in Viacom, YouTube spat

Internal emails has companies on spin control

(Note: A clarification was made from an earlier version of this story.)

The release of hundreds of pages of documents in Viacom’s suit against YouTube had both sides on spin control, not so much to push their arguments, but to mitigate the impact of the release of internal documents and emails that execs at both companies never thought would see the light of day.

YouTube, for instance, highlighted the fact that Viacom at one point wanted to buy the company, and cited a July 9, 2006, email from Adam Cahan, a senior MTV executive, who said the video site would be a “transformative acquisition that we should pursue.”

But an exchange of emails the next day from Judy McGrath, chairman-CEO of MTV Networks, and Van Toffler, MTV Networks president, showed that the prospect of buying YouTube was fraught with frustration, coming from the top.

“We buying YouTube?” Toffler asks McGrath.

“Probably not buying YouTube, if I had to wager,” McGrath writes.

“Why not, can’t prove the revenue potential?”

McGrath replies, “Because it’s our (expletive) company.”

After noting an analyst report that called for her boss, Tom Freston, to be fired, she notes that he’d had dinner that night with Sumner Redstone. Referring to Freston, she wrote, “He should pay attention to the rest of it … stop running the company for wall street.”

Toffler responds, “I do think some of it cuts to the bone. What happened to our what the (expletive) ways. It takes 3 months and 58 meetings to get a 1 million dollar acquisition done at our company. We’re fast becoming those we scorned.”

As the document dump on Thursday shows, YouTube has its own batch of embarrassing moments — and, rest assured, Viacom found them.

According to Viacom, YouTube co-founder Chad Hurley revealed in deposition that he “lost all” of his emails for “the key time period of this case.” But another co-founder, Jawed Karim, who left the company in 2006, saved many of them, and when Hurley was shown these in deposition, he developed what Viacom called “serial amnesia.”

The forgetfulness extended to Google execs. In what Viacom called “bizarre practices,” Google CEO Eric Schmidt produced just “19 documents,” claiming it was “my practice to delete or otherwise cause the emails that I had read to go away as quickly as possible.”

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