In the first such criminal trial of its kind, Judge Oscar Magi sentenced the three to a six-month suspended sentence and absolved them of defamation charges. A fourth defendant, charged only with defamation, was acquitted.
Google called the decision "astonishing" and said it would appeal.
"The judge has decided I'm primarily responsible for the actions of some teenagers who uploaded a reprehensible video to Google video," Google's global privacy counsel Peter Fleischer, who was convicted in absentia, said in a statement.
The trial could help define whether the Internet in Italy is an open, self-regulating platform or if content must be better monitored for abusive material.
Google, based in Mountain View, California, had said it considered the trial a threat to freedom on the Internet because it could force providers to attempt an impossible task - prescreening the thousands of hours of footage uploaded every day onto sites like YouTube.
"We will appeal this astonishing decision," Google spokesman Bill Echikson said at the courthouse. "We are deeply troubled by this decision. It attacks the principles of freedom on which the Internet was built."
Convicted of privacy violations along with Fleischer were Google's senior vice president and chief legal officer David Drummond, retired chief financial officer George Reyes. Senior product marketing manager Arvind Desikan was acquitted.
Prosecutors had insisted the case wasn't about censorship but about balancing the freedom of expression with the rights of an individual.
Prosecutor Alfredo Robledo said he was satisfied with the decision and that Google will now have to consider better monitoring its video.
The charges were sought by Vivi Down, an advocacy group for people with Down syndrome. The group alerted prosecutors to the 2006 video showing an autistic student in Turin being beaten and insulted by bullies at school. In the footage, the youth is being mistreated while one of the teenagers puts in a mock telephone call to Vivi Down.
Google Italy, which is based in Milan, eventually took down the video, though the two sides disagree on how fast the company reacted to complaints. Thanks to the footage and Google's cooperation, the four bullies were identified and sentenced by a juvenile court to community service.
The events shortly preceded Google's 2006 acquisition of YouTube.
All four executives, who were tried in absentia, denied wrongdoing. None was in any way involved with the production of the video or uploading it onto the viewing platform, but prosecutors argued that it shot to the top of a most-viewed list and should have been noticed.