As of the end of November, internet rating form comScore concluded that Google, Inc.'s (NASDAQ: GOOG) YouTube online video sharing service led all the U.S. online video competition, holding a 27.6% market share in September. It's no surprise -- if I were to ask 10 people where they could go to watch video on the web, my hunch is that at least 9 would say YouTube.

Was YouTube worth the billion-plus that Google paid for it? First-mover advantage is everything, and if Google can find a workable strategy to monetize the site, then most likely the $1.65 billion price tag won't look like very much. comScore also stated that Google-owned sites ranked as the top U.S. video property. In September, there were 2.6 billion videos viewed. 2.5 billion of those were via YouTube. I suspect the other 0.1 billion came courtesy of Google Video.

Coming in behind Google in September was News Corp's (NYSE: NWS) Fox Interactive Media, which includes MySpace, and Yahoo, Inc. (NASDAQ: YHOO), which saw 387 million and 381 million videos viewed, respectively. Is online video beginning to compete more and more with broadcast television? It's not too hard to let the cat out of the bag with that statement, since over 9 billion videos were viewed online in September. An estimated 75% of American internet users participated in all that viewing. Yes, I would say that is competition.

MySpace, owned by News Corp's (NYSE: NWS) Fox Interactive Media, has become the largest social networking spot on the internet, and the company is taking steps to keep it that way by purchasing the photo-sharing site Photobucket for a reported $250-300 million.

Up until now, in order for MySpace users to embed photos and videos into their space, they had to first post that content on outside sites such as Photobucket and YouTube, then embed links to it. Photobucket holds a dominant share of that photo-sharing market (41%) and over 40% of the links to its content comes from MySpace users.

A couple of weeks ago, Fox Interactive Media (FIM) began to block content from Photobucket, accusing it of encouraging MySpace users to embed Photobucket-hosted content that carried an accompanying advertisement. If this was a negotiating tactic, it didn't seem to drive the price down much; News Corp is rumored to have dropped $250-300 million for the site.

The move will allow FIM to keep MySpace customers within the family fold as they upload content, thus avoiding the possibility that while on the Photobucket site they might be lured to try a competitor to MySpace.

FIM also announced a smaller deal to buy Flektor, a site that allows users to prep better user content by editing and mashing up their photos and videos.

While their initial plan is to maintain separate identities for the companies, I'd expect FIM to eventually fold both companies into the MySpace family to create a seamless one-stop shop. It also now has the opportunity to market MySpace to the reported 30 million people that visited Photobucket in March.

While the price paid seems steep, the race to integration has become a sprint, and all the big rollers have bought into the game. It's not a market for the thin of wallet or faint of heart.

On Thursday, Fox Interactive Media (a segment of News Corporation (NYSE:NWS)) announced its purchase of Strategic Data Corporation (SDC). SDC offers services to help companies optimize their ad delivery. According to numerous news reports, the purchase was made to improve the manner in which MySpace matches ads to users who are most likely to click them and, in turn, help News Corp. increase revenues it receives from MySpace.

It should be noted that although media reports are focusing on the role SDC will play in MySpace going foward (because MySpace, owned by Fox Interactive, is one of the most widely-visited sites on the Web), Fox Interactive Media owns many other popular web properties such as AskMen and AmericanIdol.com

This acquisition makes tremendous sense for Fox Interactive because social networking sites are capable of producing extraordinary revenues per user. However, this is only realized when ads are delivered properly and efficiently. Considering the nature of social networking sites, especially MySpace, in which users list their interests, hobbies, and so on, properly placing and matching ads throughout the site should not be difficult if the technology is capable and, judging from news reports, SDC seems to be a very legitimate advertising-technology company.

It will be interesting to see how Fox Interactive uses SDC's technology throughout its network of popular web properties. I expect the entire network's revenues per user to increase as ads are matched more effectively.