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The real reason that Google bought YouTube?
The $1.65 billion purchase of the video-sharing site could actually be a boon for traditional TV ads.

When Google spent $1.65 billion for 19-month-old online video phenomenon YouTube, it was portrayed as a sign of the triumph of online video. And in important ways it is. But the voluminous coverage missed something central. Google's interest in the video-sharing site, ironically, also has a lot to do with its belief in the staying power of conventional broadcast television and cable.
It's important in watching Google (Charts) never to forget that it makes just about all its money from advertising. The fact that its role in advertising keeps growing is what, in turn, keeps its stock in the stratosphere, thus giving it the $128 billion market capitalization which enabled it to purchase YouTube with stock.
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Many writers recently pointed to the obvious opportunity for a Google-owned YouTube to profit......

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