The difference between YouTube and the boob tube

Several television networks are talking about creating a joint venture to compete with Google Inc.'s (NASDAQ:GOOG) YouTube. These networks would include Viacom Inc. (NYSE:VIA), News Corp's (NYSE:NWS) Fox, General Electric Co.'s (NYSE:GE) NBC, and CBS Corp. (NYSE:CBS). Currently, such a venture exists only in theory, and, in my opinion, this is where it should stay for a variety of reasons:

First, joint ventures between two companies have had problems because of conflicting interests. Taking four companies that are intense competitors, is just looking for problems.

Second, even though the combined groups' web presence may be larger than YouTube's current viewership, the viral nature of YouTube's viewership has a long way to go. Many of AOL's competitors made this same mistake in the 1990's. They assumed AOL was peaking just as growth was starting to accelerate.

Third, Google is now behind YouTube. Google is a perfect fit in terms of culture and marketing. Notice the Video Search function on Google. It is a perfect fit for YouTube.

Fourth, the YouTube audience may not be the same as the television web audience. I mean, is the person who hits Bill O'Reilly's web site the same one who watches YouTube?

Fifth, YouTube has a huge budget to spend with the backing of Google and can match any joint venture's spending dollar for dollar.

Finally, in order for the joint venture to be successful, YouTube and Google need to make a mistake. They have not made one yet. Until that happens, a lot of money can be lost by the joint venture.

Some joint ventures are better in concept than reality. This is one of them.

Doug Roberts is the Founder and Chief Investment Strategist for FollowtheFed.com, an independent research firm focusing on investment strategies using the Federal Reserve's impact on the stock prices.