YouTube to Big Media: You Can Sell Your Own Ads

(MoneyWatch)  It's hard to believe that, just as it was in January 2008, and January 2007, YouTube is still looking around for a viable ad model. As advertisers still have a love affair with video, and that's what YouTube serves, day in and day out, you'd think this would be an easy nut to crack, no?

Now TechCrunch's Erick Schonfeld is reporting that YouTube is planning to expand a program in which big media companies can sell ads against the content they own that runs on YouTube. Expect the TV networks, which have always had a love/hate relationship with the site because of its rampant flouting of copyright laws, to like this idea. Sure, as Schonfeld says, they have to "share the spoils" with YouTube, but they gain too, by continuing to own the relationship with the advertisers they court. While NBC Universal and News Corp. have a significant stake in the online video market in their Hulu joint venture, and CBS has big plans for TV.com, no major media company with a video business is going to be able to ignore YouTube, in the near future. First, with its quirky mix of basement karaoke and great TV content (whether legally uploaded or not), YouTube plays in a different video space than slick video sites such as Hulu. Second, it is still far and away the king of traffic in online video. As of October 2008, according to Nielsen Online, YouTube had 82.5 million unique visitors; Hulu had nine million.

What's curious about such a deal, though, is why YouTube is willing to give this opportunity over to major media companies. Maybe it's to placate them because so much of their content has been running illegally on YouTube for so long, or maybe it's that media companies, who are losing screen time to the PC, have more at stake in this game right now than YouTube does, so why do the heavy-lifting and glad-handing yourself? If your Daddy was Google, how worried about revenue would you be?