I guess John Dvorak got this wrong on this weeks Twit episode when he said this was a totally false story. According to Google's news release, they are going to acquire for $1.65 billion. It will combine the leading web video site (YouTube) with one video site that was really substandard (Google). The good news is that YouTube will operate independently, but we will still be stuck with Google Video. There could be some sticking points. The main one will be the use of copyrighted material on YouTube. According to the Wall Street Journal's announcement of this partnership, YouTube signed a partnership with CBS and Google announced a partnership with Sony BMG Music Entertainment to have music videos online at no charge.
It will be interested to see what happens with this and if Google can make it work. They certainly have the money behind them.