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Youtbe is great but that is a lot of loot!
Google has been floundering with their video program and I would imagine they tried their asses off to roll out a project which could compete with youtube, couldnt so figured it was better to just spend the money.
I read an interesting article recently on how several startups are developing technology for video (and image) search that actually looks at the contents of the media instead of external "tags." Very interesting stuff. I think whoever can master this will really turn multimedia search upside down.
Google had access to insider info on how much revenue the YouTube generated thru adsense. Now all that they need to do it to throw the Google search engine on YouTube to tripple the revenue!!