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Eric Schmidt's YouTube Holy Grail. It's time he listened to Larry Page

Google's founders yesterday offered differing views on how to deal with ads as part of their business model. Larry was right.

Google's Father, Father and Holy Ghost each released some some very interesting words about advertising yesterday.

Which makes me wonder what the private conversations of the Blessed Trinity must be like.

Mr. Schmidt declared that his Holy Grail was to find the right formula- I think he meant to say formoolah- for delivering ads to YouTube.

Should the ads crawl along the bottom of the video area? Should the run silkily across the screen before the video begins?

Or should they crawl onto your desktop and keep playing until you click a button to declare that yes, you got the message, and yes, you'll be buying the product within the next five minutes?

As I mentioned last week, it isn't easy to change an ad-free culture.

However, in a conference call with investors yesterday, Jonathan Rosenberg, Google's Senior Vice President for Product Marketing, said something that should give all YouTube (and Google) gogglers hope:

"Larry often says we would be better off if we showed one ad -- the perfect ad," said Mr. Rosenberg.

In the interests of balance, here's a bad ad for cigarettes. Dominic's pics

The Larry to whom he was referring was Google Co-Father Larry Page.

Engineers, who understand and appreciate numbers, will naturally assume that the more ads you put out there, the more money you will make.

Yet there comes a point, especially with media that have a specific emotional relationship with their readers and viewers, when the quality of the ads matters far more.

Fashion magazines understand this perfectly.

They have developed a formoolah in which they give pride of place to ads and brands that most closely reflect the ethos of the magazine.

The dubious skin scrubs and armpit creams they shove towards the back.

When it comes to YouTube, Mr. Schmidt should listen to Mr. Page and work with some of the best creative people around.

Together, they could produce ads to run alongside specific videos.

These ads would attempt to use the page in a revolutionary way and have content that would amuse and entertain the viewer rather than make them pissier than a Nascar driver in the passenger seat of a Prius.

The irony is that some of the best recent ads on YouTube- Kobe jumping over the flying sports car for Nike, Rap Partay for Smirnoff Ice- tried their best not to look like ads.

Google should be working with creators such as these to make YouTube the home of the highest quality creative work in the world.

Once they have established that persona, they can run some more pedestrian work alongside the more pedestrian (but high viewership and, um, legal) video content.

This might just make some money, you know.

The difference between Google and YouTube is that Google is a functional tool, a hammer, a screwdriver of information. YouTube, on the other hand, is an entertainment medium. (Er, I mean Internet Service Provider)

Ads should enhance that, not detract from it.

Google management has recognized this thought even on the Google site, where it has been decreasing the numbers of stultifying word-selling paragraphs.

Apparently, there exists an in-house rule that says as ad revenue improves through better targeting of messages, the company reduces the number of pages featuring ads.

Because even when it comes to a rational medium (and Joan Rivers) there is such a thing as too much.

Sergei Brin, the other Co-Father of Google, suggested this was not a perfect formoolah, as the site might end up with no ads at all.

Er, yes, OK.

But let's try the quality advertising route for YouTube. It's surely a better way to broadcast yourself and your commercial intentions.

With any luck, we could get a 66% vote in favor at the Google Summit.

Just thought I'd throw in some numbers there.