Will Google gobble up YouTube?

Search giant reportedly in talks to acquire video site for $1.6 billion.

Lots of entertainment execs have said that whoever buys YouTube will be up to their asses in lawsuits because most of the content on YT is infringing on existing copyrights. They keep making the comparison with Napster, but I disagree – the quality on Napster was pristine. Not so on YouTube, as you know. Ditto for Google Video.

So maybe Google is thinking the same thing. Or maybe they just figure that the Google ad revenue they can harvest from the revamped YouTube will be more than enough to pay all the lawyers in the world ten times over.

Think about it: 100 million page views X 20 ads per page X 1.5% clickthrough X 25 cents = approximately a lot of money every day ($7.5 million) with pretty much no additional cost because the system is already in place. So if they buy YouTube for $1.6 billion (in stock? in cash?) the additional revenue pays for the initial investment within a short time AND...and...and...you have enough to pay all the licensing fees that any copyright holder could desire. AND the system stays free for the guy who just uploaded a video of him dancing in his underwear while lipsynching System Of A Down. Which got 100 thousand views in the first 2 days. And P.S. -- Google won't have to pay HIM any money at all.

It's the perfect system: A commercial medium where the talent gets paid nothing and advertisers, lawyers and studio-heads make a bundle.

Is there that much money in the world? If so, Google will have most of it before we're done with this story.