Google, Inc. (GOOG) is still looking for ways to make its investment back (a paltry $1.65 billion) from its 2006 acquisition of YouTube. Since then, it's tried various revenue efforts and currently has a revenue share arrangement with many of YouTube's video partners.

Once upon a time, retailers measured success by the number of people walking by in the mall, how many entered the store, the percentage they spent, and basket size. Now, a world of zeroes and ones has changed their perspective entirely. Social media is expected to be the star during the coming holiday season, with retailers pushing Facebook, YouTube, and Twitter content to get in front of consumers and affect either online or in-store purchases. Smaller Christmas budgets are expected, so the fight is on to garner as large a share as possible of a shrinking pie.

Of course, nobody would come out and say, "Social media is nonsense, and I'm not getting anything for my investment." So, when the likes of Starbucks (NASDAQ: SBUX), JCPenney (NYSE: JCP), and Target (NYSE: TGT) say that social media is connecting them with their customers and leading to more effective campaigns and product launches, do take it with a grain of salt. What can't be ignored, however, is that they're committing more resources to social media marketing, even though it's still far too soon to tell if it will be effective.

MAJOR PAPERS:

• Corporate advertisers are not flocking to YouTube despite the fact that the video sharing site attracts one billion views a day, upsetting Google Inc's (NASDAQ: GOOG) expectations for a strong revenue stream, according to the Wall Street Journal. Total ad revenue for Google this year will be about $200M from the site, where the company is counting on growth beyond its text ads from Web searches.
• A day after Microsoft Corporation (NASDAQ: MSFT) said it would be interested in reopening talks to acquire some of all of Yahoo! Inc (NASDAQ: YHOO) if Carl Icahn's proxy battle succeeds, the Wall Street Journal reported that Yahoo! CEO Jerry Yang accused Microsoft of "trying to destabilize" the company "without a real desire to complete a deal".

OTHER PAPERS:

• The Atlanta Journal Constitution reported that Comair, a subsidiary of Delta Air Lines Inc (NYSE: DAL), is set to cut 300 pilots and 220 flight attendants from its staff. The paper said the layoffs will go into effect in September when Comair cuts its flight schedule as part of Delta's capacity cuts and will affect crew members based at Cincinnati/Northern Kentucky International Airport and New York's John F. Kennedy International Airport.

WEB SITES:

• Iran successfully test-launched a long-range version of its Shahab-3 missile, according to Iranian news service Al-Alam. The missile can reach U.S. military bases in the Persian Gulf and Israel.

Google (NASDAQ: GOOG) has confirmed it will end a 19-month experiment that looked doomed from the start. According to the Wall Street Journal, Google Video, the service that sold and rented the right to watch a wide range of videos for anywhere from a couple of dollars to $20, will stop showing paid programming on Wednesday. The service was expected to underscore Google's intention to create a revenue-based online video forum, a la YouTube, which Google owns. It obviously didn't work.

Donna Bogatin of InsiderChatter.com called Google Video a "YouTube wannabe" and jokingly questioned Google's recent decision to pull the plug on a service where many of their pay-to-see videos were actually YouTube videos on a Google viewer.

To compensate customers who will no longer be able to use the videos they purchased, Google is providing a refund in the form of credits that can be used in conjunction with its online payment service, Google Checkout. Check out the email they sent to users on Cnet news.com. Google declined to reveal exactly how many people purchased videos through Google Video or the total refund amount to its customers, but a spokesman said it would not materially impact the company. With YouTube and hundreds of other websites that provide free clips on the internet, it's clear that Google didn't have to cough up a lot of refund credits to the viewing public.

With YouTube and other movie sites, the Internet is going video-crazy. Well, Amazon.com wants a piece of the action and plans to launch a movie download service in August, according to a report in Advertising Age.

Although, this is not the short-form stuff. Rather, Amazon.com is going all-the-way: that is, you will be able to download full-length movies.

Essentially, Amazon.com wants to create an iTunes-like portal. Although, it looks like consumers will have different ways to purchase the content, such as through a subscription model or pay-per-view.

Since Amazon.com already sells huge amounts of DVDs, the company has a database of movie-loving customers. What's more, the company owns IMDB.com, which is a huge movie database, which is likely to be a powerful marketing force.

So far, full-movie downloads are in its infancy. But, with Amazon.com backing the movement, chances are this will become a big business fast.

Michael Eisner, former CEO of Disney, wants to once-again be a media mogul.  His resume is amazing, of course – having developed television shows (Happy Days, Welcome Back Kotter, Barney Miller) and movies (Raiders of the Lost Ark, Saturday Night Fever, The Little Mermaid, Good Will Hunting).  He also orchestrated the turnaround of Disney during the mid 1980s.

This time, Eisner sees the next phase in media being online video. To this end, he's on the board of directors of the video-sharing site, Veoh, as well as an investor. The company recently snagged $12.5 million from investors, such as Time-Warner and Spark Capital.

But it's not without its challenges. For example, the adult entertainment company, Io Group, recently filed a copyright infringement suit again Veoh.

Google Video is quickly -- along with YouTube.com -- turning into a clearinghouse for all kinds of video content, from broadcast television episodes (sometimes illegally uploaded) to amateur videos (not that kind), the question is if more and more consumers will "consume" their video from the computer screen instead of the television screen? With PCs becoming a little more integrated in the home entertainment arena these days (with ultra-slow progress), your PC may join your satellite receiver/DVR/cable box next to your television. When that happens, and you have broadband Internet at your disposal, should cable companies and traditional content producers be scared? If they have not embraced changes, then yes they should.

This week, the Wall Street Journal had a Page 1 story entitled "YouTube Tries to Build a Lasting Business." Well, according to Josh Martin, an analyst at IDC, YouTube.com is likely to be a bust.

Within less than two years, YouTube.com has become the online video site – with about 13 million unique visitors a month.  It is so influential that companies like GE's NBC are striking-up deals with the upstart.  Even the venerable venture capital firm, Sequoia (which invested in other upstarts, like Google), invested in the firm.

So what can be wrong here?  Well, it's a problem that many Web2.0/community sites have; that is, turning large masses of traffic into dollars. For example, even though MySpace.com is one of the most trafficked sites on the Web, it is expected to generate a mere $200 million in revenues this year.  This is certainly underwhelming when comparing it to other major web properties, such as Yahoo!, Google and MSN.

What is compelling about Martin's analysis is its simplicity. First, he notes that YouTube.com started as an ad-free site.  Thus, by putting ads up, it may offend its loyal base. 

And besides, advertisers may be reluctant placing ads on YouTube.com. The content on the site can range from being sexual to even violent (or just downright boring).  Why potentially jeopardize a brand?

Next, given its roots as a completely free site, YouTube.com will have a difficult time selling premium services.

Hmmmm... perhaps YouTube.com can do what PBS does; that is, have promotions where YouTube.com asks its users to donate. It certainly would be a test to see how really loyal the users are at YouTube.com.

In an interview with the Atlanta Journal-Constitution, Time-Warner's CEO, Dick Parsons, said the "whole media sector right now is in a little bit of a malaise."

The whole sector?  That doesn't seem to be the case with companies like YouTube.com.  Then again, these companies are creating their own categories in media. 

So it's ironic that today Ted Turner left the board of Time-Warner.  Of course, he's legendary in media.  He did things that many thought were absolutely crazy – such as launching a 24-hour news channel.

No, the media industry is not in a funk.  It's just the "malaise" of CEOs like Parsons.  They don't have the guts – like Ted Turner – to make big bets. 

As for Parsons, he is doing the typical things:  small acquisitions, stock buybacks, division sell-offs, and so on.

Why not try something daring?