Tensions between technology and media companies, Google and Viacom, are increasing as Google CEO Eric Schmidt said to reporters that litigation was the foundation of the company that owns the MTV, Comedy Central and Nickelodeon cable networks.

"Viacom is a company built from lawsuits, look at their history," Schmidt said early Friday. "Look who they hired as CEO: Philippe Dauman, who was the general counsel for Viacom for 20 years," he added.
Viacom has hit internet search leader Google with a $1 Billion lawsuit over "massive copyright infringement" by its video sharing Web site YouTube. Viacom has demanded that YouTube takes down thousands of segments from its popular programs including The Colbert Report and South Park.

Google has stated that they are developing tools to help IP owners monitor and block copyrighted material from being uploaded, and that they are in compliance with the law as long as they take down the material as soon as they are notified. Schmidt also pointed to a 1989 Anti-trust suit against HBO, where Viacom sued for $2.4 Billion. The suit was settled out of court; Time Warner paid $75 Million in damages and agreed to purchase a cable system owned by Viacom for an above-market price.

The stakes are high for both Google and Viacom in the dispute over YouTube, and the companies are still trying to find a way to work together. Early speculation is that the case, which started this month, will last until the end of the year.