Google mulls $1.6B US YouTube purchase: report

Google Inc. is in talks to buy YouTube Inc., the company that owns the popular online video sharing website YouTube.com, for about $1.6 billion US, the Wall Street Journal reported Friday.

But the talks are at a sensitive stage and may break off, the newspaper reported, attributing the news to an anonymous source familiar with the matter.

Rumours about the negotiations between Google of Mountain View, Calif., and San Mateo, Calif.-based YouTube were reported earlier on the TechCrunch blog.

Last week, billionaire entrepreneur and dot-com veteran Mark Cuban said "anyone who buys that [YouTube] is a moron" because of the potential for copyright violation lawsuits.

"There is a reason they haven't yet gone public, they haven't sold. It's because they are going to be toasted," Cuban told a meeting of advertisers in New York.

Cuban's sentiments were echoed by Forrester analyst Josh Bernoff, who wrote in a blog post, "YouTube will get sued. And it will lose."

Deal with Warner Music

Last month, Warner Music Group inked a deal with YouTube to distribute its music videos, artist interviews and other video content online.

The music company will be the first to use a new system YouTube announced last month that is to give media owners greater control of videos that appear on the site.

The system, which is to roll out by the end of the year, is intended to address industry concerns about copyright and royalty payments.

YouTube, founded in February 2005, says it serves visitors videos 100 million times a day, and that its users upload more than 65,000 videos daily.

A ComScore Media Metrix report released last month placed the number of videos streamed on YouTube in July at 649 million, or nearly 21 million a day.