According to RedHerring, Google CEO Eric Schmidt faced some tough questions about one of our popular postings recently:

Mr. Schmidt, however, denied that Google set aside a huge amount of hush money to be paid to media companies, which create a big chunk of the content uploaded to video hosting sites, to look the other way when copyrighted material is illegally downloaded to YouTube, which hosts videos that are viewed 100 million times daily. But Mr. Schmidt said Google is negotiating with the big entertainment companies over thorny copyright infringement issues, but solutions aren’t simple. “We’ve talked to everybody,” Mr. Schmidt said. “All the [media] companies have complicated rights management systems.”

Does it really matter if there is a “hush” money fund if suddenly all the media companies are willing to “negotiate”? In the end the effect is the same, copyright infringement can flourish on YouTube while it is crushed on smaller competitors. Oh well.