Most people are aware that Google bought YouTube in October of last year for $1.6 Billion. At that time it was unclear what the fate of GoogleVideo would be. Searching today on GoogleVideo I find most of the content is actually being hosted on YouTube.com and Google Video (which still says Google Video beta) is being used simply as a site to catalogue YouTube content. Reports show the search giant and it’s newly acquired hip little cousin are still wrangling over details of how to make the merger work. YouTube’s revenues for the past year were only around $15 million, so Google is deep in the hole over the purchase. The potential money to be made if the thing is done right will more than make up for that though, and this is what Google is currently working on. How to make money from ads on YouTube while struggling to keep ahead of fresh competition from sights like Joost, Daily Motion and VideoSift.

Couple that with the recent lawsuit served against Google for $1 Billion by Viacom over YouTube copyright infringements and the company has got their hands pretty full. They have however just signed a deal with the NBA to host content on YouTube, so these are problems whose solutions will lead the company in new directions I believe.