Insider Chatter by Donna Bogatin

Is the (promised) soon to be launched News Corp./NBC Universal online premium video joint venture a good buy at $1 billion is (one of) the blogosphere’s questions du jour.

Dow Jone’s Kara Swisher weighs in, succintly: “NO,” billion dollar case closed. Swisher did not promise a rationale for her “conclusion”; Her “story” is headlined “In a Word.”

Is it really video valuation case closed though? I heard the NBC ad sales point man for the News Corp./NBC Universal JV give his (inherently rosy) take yesterday on prospects for the soon to be launched “high quality” video intitiative.

READ my first-hand report: NBC: Millions in Upfront Video Ad Sales

Regardless, online video beauty is in the eye of the holder. YouTube was a $1.65 billion in GOOG beautiful thing, for search-driven Google. Google itself implicitly acknowledged the “price” was substanially all goodwill during its Wall Street conference call:

QUESTION: Any idea on what you used to value this acquisition? Were you looking at cash flow returns or any kind of help you can give us on that?

GOOGLE, David Drummond, SVP Corporate Development on the “structure” of the deal: We model this on a more or less synergistic kind of a model. You can imagine that it might be difficult to sort of do this on a standalone basis. We feel that we arrived at a purchase price that’s very fair and reflects the great value that’s been created at YouTube.

We structured this as a stock transaction in order to make it tax free for the YouTube shareholders, which we think is a good transaction for them and for us, in the sense that it in some ways made it cheaper for us. There is some very slight dilution, but we think this was a good structure.

Good for Google, direct “cost,” wise yes, BUT not from the perspective of potenitally massive indirect “costs” it assumed when acquiring the DMCA fueled no need to pay for the content of others buisiness model.

Google is currently exposed to billions of dollars worth of copyright infringement lawsuits, literally.

Viacom’s $1 billion copyright slap at Google may end up being mere peanuts.The copyright infringement class action currenlly being prosecuted against YouTube by Proskaeur Rose is opened-ended with no theoretical bounds on the financial liabilites Google may incur.

READ my exclusive interview with Proskaeur Rose: YouTube Copyright Infringement Claims ‘tip of the iceberg’

In the event of such a Google meltdown, a News Corp./NBC Universal copyright friendly online video venture could be worth not just one, but several billions.

CONTACT DONNA BOGATIN