Google may buy YouTube for US$1.6B

Google may buy YouTube for US$1.6B

Google's reported interest in YouTube would reflect a sense of urgency on the part of the search engine giant to improve its position in the red-hot online video market

Critics have blasted YouTube for being lax about ridding its catalogue of copyrighted videos uploaded without permission. Some predict entertainment companies will sue YouTube out of business.

Thus, Google needs to walk a fine line between copyright protection and preserving the appeal of YouTube's rich catalogue, Sterling said.

Still, gaining YouTube's audience gives Google an enormous opportunity to boost its fledgling efforts in video advertising, of which it has done very little, Sterling said.

Most of Google's revenue comes from text ads that run along with Web search results. Google is trying to diversify its business with other types of ads, such as banners and video.

However, its video ad efforts have been hurt by Google Video's relatively weak position in the market, Sterling said.

For YouTube, getting bought by Google would mean salvation from death by copyright litigation, wrote Josh Bernoff, a Forrester Research analyst, on his blog Friday.

Google has the technical resources YouTube lacks to implement a system to automatically detect and remove copyrighted material, Bernoff wrote.

If dealing with lawsuits, Google -- unlike YouTube -- can negotiate with plaintiffs and reach amicable resolutions to ligitation, according to Bernoff. "By itself, I still think YouTube is toast. But with Google -- maybe not," Bernoff wrote.

Google and YouTube declined to comment.

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