Google CEO denies offering to buy startup for $600 million that then caught fire

Google CEO Sundar Pichai testified briefly Friday in the federal financial conspiracy trial surrounding startup Ozy Media, countering founder Carlos Watson’s alleged claims that the search giant once tried to buy Ozy.

Google considered hiring Watson for a high-level news executive position in 2021 and putting $25 million into Ozy as a kind of compensation for pushing him away, Pichai told jurors.

“Mr. Watson was a fundamental part of Ozy Media and we were considering making an investment in the company to facilitate the transition,” he explained.

But “did you ever offer to buy Ozy Media for $600 million?” prosecutor Dylan Stern asked.

“No,” replied Pichai, who heads Google and its parent company, Alphabet Inc.

He said he was introduced to Watson at a conference and then in a video interview for a possible job at Google interacting with the media. In the end, neither the hiring nor the investment of 25 million dollars came to fruition.

According to prosecutors, Watson later told another potential investor that Pichai himself had made a nine-figure offer to buy Ozy. The Mountain View, California-based company produced television shows, podcasts and a music and ideas festival before collapsing in the fall of 2021 amid questions about whether it had flagrantly misrepresented its audience reach, deals and finances. .

Ozy Media attorney Shannon Frison said in an emailed statement Friday that it is “unequivocally false” that Watson told anyone that Google had made a $600 million offer.

“He never had a conversation like that with Google and he never told anyone that he had one,” Frison said.

Watson and Ozy Media have pleaded not guilty to charges including conspiracy to commit fraud. He has said that he built a solid and real company, that he did not defraud anyone and that he is being singled out for prosecution when he made, at best, business “mistakes.”

Defense attorneys have blamed any misrepresentations on Ozy co-founder Samir Rao, saying he is falsely implicating Watson in hopes of avoiding prison himself. Rao pleaded guilty to identity theft and conspiracy to commit fraud, and is awaiting sentencing.

He previously testified at trial that his “moral compass” was altered by ambition, desperation to keep the company running, and “Carlos’ deep belief that failure was not an option and that we had to do whatever it took.” ”.

Among other deceptions, Rao posed as a YouTube executive, even using a phone app to disguise his voice, to defend Ozy to Goldman Sachs investment bankers on a February 2021 call.

“It was one of the most disturbing calls I’ve ever received in my career,” Goldman executive Hillel Moerman testified Friday, calling the episode “a surreal experience.”

Rao testified that he did the phone trick to support a false claim that YouTube was paying for Watson’s eponymous talk show. Rao said Watson was with him during the call and texted him what to say: “I’m a big fan of Carlos, Samir and the show,” read a text shown to jurors.

Defense attorney Ronald Sullivan Jr. said Watson entered the room during the call, realized “a live train wreck” was unfolding and tried to get Rao to end the conversation.

On the other end, Moerman thought the alleged YouTube executive’s voice seemed obviously “muffled,” among other clues that made Goldman bankers suspicious, he recalled Friday.

One of his colleagues soon called the current executive at Alphabet-owned YouTube. The ruse fell apart. He also did the potential for an investment in Goldman.

“They had lied to us,” Moerman explained to the Brooklyn federal court jury.

Goldman Sachs continued advertising with Ozy after the episode, according to Rao’s testimony.

Watson told the Goldman and Ozy board that Rao had suffered a mental health crisis. Rao told the jury that he was taking antidepressants at the time but that he was not undergoing a psychiatric break.

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