Google Buying Out YouTube?

A rumor from TechCrunch shows that Google Inc. (NASDAQ:GOOG) is thinking about bidding for YouTube.  An article in the Wall Street Journal indicates Google is in talks to acquire YouTube Inc. for roughly $1.6 billion, according to a person familiar with the matter. There’s nothing solid yet and this could all dissolve overnight…but there’s talks.

YouTube was only launched in Feb 2005 and commands more than 46% of the total U.S. online video site traffic.  Pretty impressive numbers for a site still in it’s infancy.

YouTube has a been a brilliant viral marketing platform for many savvy marketers.  It also is a search engine optimization machine.  With thousands of people posting videos a day the search engines crawl through the site regularly and index almost everything. 

No doubt Google wants to break into the social networking scene.  Not too long ago Google was prepared to pay $900 million for MySpace but that never panned out.  If they acquire YouTube they will have some well established web real estate that will put them far ahead of their rivals (i.i MSN, Yahoo! etc.).  In addition, Google will be able to effectively monetize YouTube, which is something the current owners have had difficulty conceptualizing.