Google in negotiations to buy YouTube for $1.6bn

NEW YORK - Google is in talks to acquire video-sharing website YouTube in a $1.6bn (£857m) deal.

The deal between the companies is expected to be concluded this week. It could mean that Google's online ad program AdWords is rolled out across YouTube.

YouTube had 58,000 users in August last year but is now visited by around 12m a month, according to ComScore MediaMetrix.

Other companies that are reported to have been in talks to buy YouTube are Viacom and News Corporation, which already owns the social networking site MySpace. However, it is believed a deal with Google would suit YouTube better, because it would sidestep issues about running content from rival media companies.

While all eyes have been on the site and potential acquisitors, one dotcom investor, Mark Cuban, has said that anyone paying for YouTube is a "moron" because the site would be "sued into oblivion" for infringing copyright.

However, there are signs that the record labels, whose videos appear on the site, are more interested in working out how they can use it to market their artists and make money, rather than risk incurring the wrath of the millions of members who are used to getting stuff for free from the internet.

Warner Bros has done a deal with YouTube to make videos and other content available legally and other record companies, including EMI, are in talks to do similar deals.

Microsoft and Yahoo! are each trying to emulate the success of YouTube with their own video websites. Microsoft has launched Soapbox and Yahoo! Video made its UK debut last week.

The sites encourage users to upload their own content, such as video blogs, as well as sharing clips they have taken from other sources.

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