Google (NASDAQ: GOOG) does not appear to have made any real money from YouTube, especially given how much the company earns from its search ad business. There are not a lot of advertisements on YouTube, but Google may have come upon a plan to get dollars out of the big video-sharing site another way.

Marketers using the Google ad network will be allowed to use certain YouTube videos in messages on the network's sites. According to The New York Times : "The Internet search giant is expected to introduce a service on Tuesday to allow Web sites in its ad network to embed relevant videos from some YouTube content creators. A Web site or blog specializing in hiking, for instance, might choose to embed hiking videos from YouTube."

Google will share ad revenue with the video content creators. The program is in its earliest stages and only 100 companies are set to offer their video as part of the program. Given the millions of videos on YouTube, that figure is likely to change soon.

The idea looks good on paper and it may work in practice, but it could have drawbacks. Much of the video on YouTube even from professional companies has mediocre picture quality, and there is no guarantee that adding video to a marketing message will make it any more compelling or effective than text ads.

Beyond those issues, it is a brilliant idea if it works.

Douglas A. McIntyre is a partner at 24/7 Wall St.

The management at CBS (NYSE: CBS) has caught onto something that should have been obvious. Most internet users don't watch full-length video on their PCs. It could be the small screen size or lack of remote control.

Part of the success of YouTube may be that the typical video on that site runs just a few minutes. It captures attention and keeps it, often until before the viewer gets bored. CBS is trying to adapt its video model to the reality that shorter clips appear to be watched much more often.

CBS will launch CBS EyeLab, a production operation that will put together short clips from a number of its shows and distribute them to a wide variety of websites. According to The Wall Street Journal "CBS says the EyeLab-produced clips will both entertain viewers and serve a marketing purpose."

Everyone already knew that most internet videos, especially on sites like YouTube, are watched by teenagers and young adults. People in this age group have the attention span of a house pet, so catering to their inability to stay focused for long is a brilliant idea. Especially since CBS is controlled by an owner who is past 80.

Douglas A. McIntyre is a partner at 24/7 Wall St.

It's hard to imagine that a single website could bring in so many visitors every day, but if we are to believe a recent report that analyzed metrics from web analysis firm ComScore, Google, Inc.'s (NASDAQ: GOOG) YouTube property is doing just that. According to JMP Securities, Google has accomplished quite a bit of growth from the July 2006 period to the July 2007 period. Should Yahoo, Inc. (NASDAQ: YHOO) and Microsoft Corp. (NASDAQ: MSFT) be worried at these Google growth numbers in the last year?

• Worldwide users up 20%
• U.S. users up 18% (now 22% of 552 million global total)
• Time spent on sites up 113%
• Page views up 56%
• Google Maps up 98% to 682 million, crushing Yahoo's 397 million (which is up 32%)

Those numbers, if validated, are hugely significant. Google's command of the time spent on the internet is increasing in a large way, and with the possible fact that Google's YouTube is commanding 28% of the total minutes spent on Google's global web properties, what is next? How about less revenue for starters? YouTube is not nearly as profitable as Google's cash-cow AdWords system, which brings in nearly all of Google's current barn-burning revenue every quarter. If more and more eyeballs shift to YouTube instead of Google Search, will Google's revenue suffer? Maybe.

Google has to figure out a way to make YouTube (and other public properties that are popular) profitable in a growing way. It's just now starting to experiment with this, adding ads to YouTube (to the chagrin of many customers) and it will inevitable try other ways to sift advertising revenue from the YouTube property. If it doesn't, a revenue crimp from the company may be a result in future quarters. Well, that is, if AdWords stops growing as a revenue source, which probably won't happen.

Two stories in the news point to the growing stress the communication age is putting on our infrastructure.

According to ABI Research, cable providers could be approaching a crisis in capacity in their last-mile systems. As video on demand, online gaming and high definition television eat up more and more capacity, customers may find themselves on the slow end of a battle with their neighbors for packet priority. An analogy might be the line that would form at the only well in a neighborhood where everyone is putting in pools.

Others question whether the tubes of the internet's backbone are large enough to serve the dramatically increasing call on them. Total capacity usage is roughly doubling every two years. Cisco Systems (NASDAQ: CSCO) estimates it will reach almost 8 million terabytes per month by 2011.

Wall Street is a funny place. The concoction of fear, greed, a lot of money, and the potential to be humiliated at any time from a random event causes smart people to do silly things. While I often read analyst reports and tend to believe they can offer value for certain situations, every once in a while I come across a pretty bizarre upgrade or downgrade.

As Kevin Shult reported on BloggingStocks earlier, Hambrecht downgraded Akamai Technologies (NASDAQ: AKAM) from a buy to a hold. Normally I wouldn't really think much of such a subtle downgrade, but it seems like this downgrade goes against any logic.

If you look at the chart to the right, shares of Akamai have been killed during the last month. Off more than 40% from their highs, it would only seem logical that shares have become more attractive for new money than they were at a price 60% higher than the current quote.

But according to Hambrecht, this isn't the case. As I said before, this seems to go against any logic, especially if someone looks at a stock as a share in a business.

So why do I think they downgraded the stock? In my opinion, they probably wanted the poor performer off their buy list because it's currently humiliating them due to its poor performance. Once the stock trades back up 20-30%, they will re-add the stock to their buy list with the hopes of continued momentum.

Douglas McIntyre made an insightful post on Saturday regarding Limelight Networks, Inc. (NASDAQ: LLNW) and the internet video business. While I agree with my colleague on several of his points, I think it's too early write off Limelight.

Like any recently-launched IPO, Limelight's trading history has been anything but calm and easy-going. Simply due to the nature of the process, sentiment for IPOs seems to rapidly shift from euphorically positive to exceedingly negative. At the outset, investors and traders are extremely hyped on a company's products, management, and future. When the new issue finally hits the market, it tends to move up very quickly, especially if it's in a hot sector and riding an interesting secular trend. For example, look at the lululemon athletica inc. (NASDAQ: LULU) IPO. Although the stock was priced at $18 per share, it came public above $30 per share and has since traded even higher. This is an incredible company which I will feature in about a week, but for now all you need to understand is that Wall Street is tremendously optimistic about the company's 'lifestyle' branding power and store growth potential.

Similarly, investors were very excited about Limelight when it first came public. After watching Akamai Technologies, Inc. (NASDAQ: AKAM) fly on powerful momentum in the internet video space, the chance to buy a younger, smaller, faster growing internet video company excited investors beyond belief. When the stock came public, it finished its first day of trading $24 per share, good for a premium of more than 50% over the issue price.

But the good times don't always go on for new issues. Any news that can lead to skepticism for these preciously-priced story stocks can be simply devastating for the newly-issued stock. As Doug noted in his post, the sector is not doing as well as people had first expected -- price wars have plagued the company. As a result, bad news seemed to plague this quarter -- guidance was cut, pricing power is diminishing, etc.

Amazon Inc. (NASDAQ: AMZN) and TiVo have joined forces in the war to take the top spot in the realm of video content provision. Unfortunately, the team has opted to take a route which cuts personal computers out of the video-viewing loop. That's a sad miscalculation if you ask me.

It is reported that the Amazon-TiVo team will be directly selling movies, episodes of television shows and other video content for a price range of $2 to $4 for download directly to TiVo units with the "Amazon Unbox on TiVo" upgrade and high speed internet connections. This is a service which broke ground in February of this year and which at that time required users to choose their entertainment selections using a personal computer. It is my interpretation that the current move by this entertainment alliance, in making their venture "TiVo specific," is a misguided attempt to herd would-be video subscribers into the TiVo format and away from the worldwide video content web.

Bad move, limited scope, consumer inflexibility and restricted horizons are some of the verbiage that enter my thinking when considering this attempted move. As of right now, the Amazon-TiVo team indicates the availability of about 10,000 video selections for their service offering. Umm, excuse me for being so crass but it sounds to me like they're "spitting" into the wind.

Just take as a token indicator the fact that for someone to use this questionable service, they need to have a high speed internet connection. So, if you're going to go with a high speed internet connection to grab some video content why in the world would anyone restrict themselves to a selection of 10,000 viewing opportunities and bypass their personal computer in the process?

I myself wouldn't touch this scenario with a 10-foot fiber optic cable. That is, if I had one.

The old Wall Street expression I have heard a million times, mostly in the negative camp is "the company has too many moving parts." Well, the same can be said about Apple Inc. (NASDAQ: AAPL), but only in the positive camp. So as Apple hit a new 52-week and all-time high of $119, what is going on? Let's look briefly at all the "moving parts."

Yesterday, it was announced that Apple stock will be included in the S&P 100 as of the end of trading today. It's definitely a prestigious move for Apple, and one the company did not have to request. S&P determines who the member companies will be. Many structured portfolios must buy the shares to keep up with the 100 stocks in the index. Typically these funds finish this chore within three days of the announcement. Apple traded 52 million shares on Wednesday, twice its normal amount.

Apple announced that its Apple TV will soon have the capability of offering the ever-popular YouTube internet video site on its Apple TV set-top box. This is another confirmation of the growing and consumer-driven philosophy at Apple. If the consumer wants it and the addressable market is large enough, Apple will offer it and probably dominate.

Steves Jobs wanted some extra attention at the All Things Digital Conference, and he got it.

Apple (NASDAQ:AAPL) announced that it new TV set-top box would get a software download that will allow it to stream YouTube video to a TV set. The deal gives Google's (NASDAQ:GOOG) some exposure, but it hardly needs any more than it has as the world's largest video- sharing site.

The partnership leaves open a couple of questions. The first is whether consumers want to watch low-resolution video on a TV screen. Anyone looking at YouTube's most popular videos will find that many of them are fuzzy and that some detail is washed due to low frame-rates or poor camera quality.

The other, perhaps larger issue is whether the media companies doing battle with YouTube over copyright will be upset by Apple giving the video site yet another venue for showing its content.

Whether it is reasonable or not, Viacom (NYSE:VIA) may not want to see a company it is battling in court doing business with Apple. The iPod and computer company does have to be careful. It is already in the video download business. But, on the iPod, it makes money.

Douglas A. McIntyre is a partner at 24/7 Wall St.

In the past few weeks, several friends have asked me if I have any ideas for alternative energy stocks. Although I follow the industry fairly closely, I replied that I do not. I don't think there's any doubt that alternative energy is the future, but as Anne Kates Smith wrote at Kiplinger.com, there are numerous questions surrounding exactly what that future will look like. Another thing for investors to remember: Counterintuitively, just because alternative energy is the future does not mean that investors will be able to make money with these stocks. Even though the internet was certainly the future in 2000, those stocks were a poor investment. Innovative technology does not always mean big profits. Warren Buffett (I used this same quote in a piece on internet video, an industry that suffers from many of the same questions) opined on this paradox, using the airline industry as an example:

Sizing all this up, I like to think that if I'd been at Kitty Hawk in 1903 when Orvile Wright took off, I would have been farsighted enough, and public-spirited enough -- I owed this to future capitalists -- to shoot him down. I mean, Karl Marx couldn't have done as much damage to capitalists as Orville did.

I won't dwell on other glamorous businesses that dramatically changed our lives but concurrently failed to deliver rewards to U.S. investors: the manufacture of radios and televisions, for example. But I will draw a lesson from these businesses: The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage. The products or services that have wide, sustainable moats around them are the ones that deliver rewards to investors.

Presidential candidates are trying to lure voters on News Corp.'s (NYSE:NWS) MySpace site, showing that they will go to any lengths to feign interest in the concerns of America's youth.

Next up, John McCain will try out for the X games. Hilliary Clinton will dive into a mosh pit while Barack Obama woos voters playing "The Second Life." Mitt Romney seems a bit straight-laced for anything extreme. He's going to have to learn how to skateboard.

The Web will be a key battleground for the 2008 presidential election. Howard Dean paved the way for this though the enthusiasm of his Internet supporters didn't translated into enough real-world voters. Both Democrats and Republicans, though were stunned by how much money Dean raised over the Web.

Since the country is pretty even divided, every constituency there is a going to be a big fight for every demographic even young people, most of whom don't bother voting. This is going to be a boon for MySpace and Google Inc.'s (NASDAQ:GOOG) YouTube though it's unclear how much profits they will make from political spending.

But candidates need to be careful. Internet popularity can be fleeting. Thanks to the Web, there's no hiding from mistakes. Gaffes, mi statements and other errors spread on the Web faster than speed of spin.

It was a big year for Web2.0, especially with Google's $1.65 billion acquisition of YouTube.

But what about 2007? What can we expect?

I had a chance to interview a variety of top players in the space:

Suranga Chandratillake, founder and CTO of blinx:

In 2006, video sharing was the biggest trend with lots of companies -- especially the smaller sites -- growing really fast, which highlights the demand for online video. We also saw a great jump in user-generated content. But, traditional media and entertainment companies are catching up and seeing the Internet as a great distribution channel. In 2007, we expect to see even more content on the Web -- especially high-quality content -- and a greater need for better video search engines that can help Internet users navigate through the clutter. Also, with the Internet making content creation and distribution cheap, we expect to see a lot of experimentation with the length of videos and advertisements.

Michael Eisner hasn't been up to much since his departure from Disney.

It looks though, like Eisner is eyeing the Online Video space.  With broadband becoming more and more prevalent in US homes, the technological infrastructure/capability for streaming videos is reaching fruition.  With American Idol and the plethora of reality t.v. shows abounding, there is a discernible trend towards amateur/'real' videos and the corresponding stars and starlets.

The space is still being defined, but already net giant Google and Yahoo are getting positioned with video versions of their respective search engines. 

Google Video is a portal type page which is hoping to bridge the gap between amateur and licensed videos and programming. 

YouTube though is arguably the most successful player in this space, pulling in 9 million users a month (according to Nielson/NetRatings)

Eisner will also sit on the board of directors for Veoh.  The online network space is a very interesting one and one to keep an eye on. 

For Time Warner the natural motives would be to incorporate Veoh or a module/shell into its AOL portal.  The distribution aspect is also huge as Time Warner's video content is tremendous (ie. Warner Brothers).