Google chief says company will create new video platform

PALO ALTO, Calif. (MarketWatch) -- Google Inc. (GOOG) said that its acquisition of YouTube Inc. will hasten its push into online video with an opportunity to create a new video platform for the Internet.
Speaking on a conference call with analysts Monday, The Internet search giant said it saw numerous ways to integrate YouTube with Google's own sites while allowing the company to remain as an independent operating group.
Chief Executive Eric Schmidt said the company would keep the YouTube brand name while exploring opportunities to place advertising on the site.
"Most people believe this is just the beginning of the Internet video revolution," Schmidt said. "YouTube is one of many investments we will be making."
Google CEO Schmidt described the company's $1.65 billion acquisition of YouTube as a "next step" as Google seeks to address the growing demand for online video. He said Google will "never" discontinue its own Google Video site and will in fact push to more closely integrate the it with the company's other online properties.
Google Video is "doing very well," Schmidt said.
YouTube's greater focus on social networking drew Google to the acquisition, he said. Many of YouTube's users create their own videos and post them to the site to let others view their content.
"We think the brand has value," he said.
Google declined to comment on the bidding war YouTube, but said it viewed the purchase price as "very fair." Google expects to see a "slight dilution" to earnings from the deal.
Speaking on the conference call, Google co-founder Sergey Brin said he saw opportunities for advertisers in the YouTube site.
"I expect it will be a great channel for advertising," Brin said.
Google added that it had not eliminated the idea of showing ads inside YouTube videos, potentially before a video runs, much the same way rival Yahoo Inc. (YHOO) forces viewers to see ads.
Brin also pointed to Google's interest in become a search engine for video content on the Web.
"Video is a very important part of the world's information," he said.
YouTube executives said on the call they expected improved search on their site by working with Google.