While each of the defendants has the right, ability and legal obligation to prevent infringement of plaintiffs’ copyrighted works, they have allowed infringement to go unchecked, content to profit handsomely from advertisements that appear side-by-side with infringing content.

What's particularly about the suit is that EMI's strategy seems to imply that because VideoEgg used technology like Audible Magic and human review to filter copyrighted content from the company's servers, it's more liable, not less.

No wonder YouTube took so long to install filtering software, which has long been demanded by rightsholder organization like the Recording Industry Association of America. In a prepared statement, VideoEgg argues the suit is without merit and asserts that it upheld the law under the DMCA:

VideoEgg has consistently worked to employ best practices to protect content owners. We took all the steps necessary to avoid copyright infringement issues, including systemwide deployment of Audible Magic, the leading provider of content identification services. Moreover, we have never received a takedown notice from EMI nor any of its affiliated companies.

Moreover, the company's deal to provide Hi5 with video uploading services for the social network's users ended in April, so it can not be accused of continuing to enable new cases of infringement. What's worrisome is that EMI is going after a company for doing exactly what the RIAA asked — pro-actively policing its network for infringement. And where's ostensibly tech-savvy former Googler Douglas Merrill in all of this? Somebody needs to explain to EMI's legal team how bad it looks trying to punish one of the companies actually doing their bidding.

MySpace has only added 8 million users since last year — and lost users since October. Valley darling Facebook has nearly doubled its user base, jumping from 19 million to almost 35 million users. Live Spaces and Hi5 have lost users, while Bebo and, incredibly, Friendster have added users, though they are still nowhere near the market leaders. The site with the big focus on business, LinkedIn, has more than tripled in size since last year — but shows almost no growth the past 3 months.

Leaving aside December, which is a likely outlier for engagement thanks to the holidays, Facebook, Bebo, Hi5 and LinkedIn all show growth between December 2006 and November 2007. Only MySpace and Live Spaces show a drop during that time period — a particularly ominous sign for News Corp.'s MySpace. At 196 minutes per visitor, it's still light years beyond any of the smaller sites. Friendster, which had shown strong engagement growth, up to 109 minutes in October, fell to under 70 minutes in November before plummeting to 40 minutes in December.

As Creative Capital points out, the News Corp. earning announcement next week will give the first insight into the money numbers from MySpace — and we'll know if the slowing growth is affecting the bottom line.

• The New York Times: Google's Orkut, LinkedIn, Hi5, Friendster, Plaxo and Ning
  
• O'Reilly's Radar: Hi5, iLike, Slide, LinkedIn, Plaxo, Ning and Six Apart
  
• TechCrunch: Orkut, Salesforce.com, LinkedIn, Ning, Hi5, Plaxo, Friendster, Viadeo and Oracle
  
• Valleywag: Hi5, Orkut, LinkedIn, Friendster, Ning, Salesforce.com, and Oracle

Guess the only way to find out for sure who's involved is to attend CampFire Thursday night on the Google campus. We would, but we have a thing against CamelCase. But bring us back a s'more, wouldja?

(Photo by russelljsmith)