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Viacom Backs Out of Web Venture Talks

The new Internet video Website collaboration that has been discussed by media heavy hitters including NBC Universal, News Corp., CBS, and Viacom may be on the rocks after Viacom backed out Tuesday afternoon, according to multiple sources familiar with the talks.

According to a source familiar with the negotiations and contrary to published reports, Viacom was interested in such a venture until Tuesday, when it decided to step away.

The idea was to create a rival to YouTube--recently purchased by Google for $1.65 billion--that could potentially feature both prominent television programming from the participating companies as well as user-generated content, thus pulling ad dollars and traction away from YouTube.

But any potential arrangement seemed tricky from the outset due to differing agendas from the potential participants. For example, News Corp.’s My Space and Viacom’s MTV Networks online properties are in direct competition.

According to reports, Disney was not part of the talks.

Spokespeople from both Viacom and News Corp. declined comment, while an NBC Universal spokesperson had not been reached at press time.