Google to tie-up US deal

Online search engine giant Google will this week tie-up a $1.6bn deal to scoop up video sharing website YouTube, it was reported today.

Internet surfers have made the site one of the world’s most popular destinations on the web with an estimated 100 million video clips viewed every day.

However, while YouTube has drawn big crowds, it has yet to prove it can generate profits and Google is thought to be keen to maximise the untapped potential.

The Sunday Times has suggested the site’s owners would welcome financial help to support the cost of hosting the ever growing number of clips – reported to be $1.5m each month.

Google is reported to be eager to run advertisements along the side the videos in a similar fashion to its popular search engine facility.

California-based YouTube has become a massive internet hit since it was launched in a Silicon Valley garage 19 months ago by two friends.

Last month it signed a deal with Warner Music which will allow users to watch thousands of videos by artists such as Madonna and the Red Hot Chili Peppers.

The landmark deal, which comes after concerns were voiced about the amount of material subject to copyright that currently appears without permission, was seen as a significant step in the entertainment industry’s process of embracing the internet.

In August, Google announced it was providing search and advertising at online hangout site MySpace.com, along with a host of other websites owned by News Corporation’s Fox Interactive Media arm.

The deal could see Google pay Fox $900m by 2010 as long as web traffic targets are met, but the companies said they could also forge a deeper relationship in the future.

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