Google goes after video, forgets about YouTube

In an important announcement that could have a major impact on Google's future in video, the New York Times is reporting that Seth MacFarlane, the creator of "Family Guy," will start "Seth MacFarlane's Cavalcade of Cartoon Comedy", which Google will syndicate (using AdSense) to thousands of Web sites that fit with MacFarlane's target audience. Instead of a static ad, Google will place the video clip on the site.

Interesting, huh? Not only has the company found a way to bring video to the Web and finally make some money on it, but it has nothing to do with YouTube.

Am I missing something here?

Did Google just happen to forget that YouTube is still hanging around with no prospects for revenue and no advertising platform? I commend Google on forming this deal with the world's most popular cartoonist, but why wouldn't it try to do something on the YouTube front?

Ostensibly, Google believes this idea will yield better revenue, but it still doesn't solve the one problem it can't figure out: YouTube is becoming the company's albatross. And if you ask me, this "Cavalcade" would be best served on YouTube.

Then again, maybe Google doesn't want to play the traditional advertising game with Seth MacFarlane. Instead, the company seems to be under the impression that by using it on its AdSense platform, it'll use the video to its advantage, while helping customers add some entertainment to their sites and hopefully increase their own ad revenue.

But I'm not sold on that.

Regardless of the fact that Google can probably make more money on ad revenue through this distribution scheme, I don't think it's the best way to go about it. Instead of tying MacFarlane's income to a portion of advertising revenue, and thus forcing itself into this distribution deal, Google should have paid MacFarlane a flat fee for his services and added this show as an exclusive on YouTube.

Upon doing so, Google solves two problems: it solves the issue of controlling content, thus ensuring that more advertisers would be willing to spend cash on the show, and finally turns YouTube into a destination for high-quality content and advertising dollars, instead of a toilet for the worst videos on the Web.

This deal strikes me as nothing more than a cash grab. Sure, it's a big step for online video and it could have a major impact on the industry, but let's not forget that it does nothing for YouTube -- the one place Google needs all the help.

From a purely financial standpoint, this deal makes sense, but finances should be the least of Google's troubles right now if it can't turn YouTube around. It's already a company with solid financial health, but its looming issue with video has yet to be solved. If it can't turn things around with YouTube soon, all the money it's making with MacFarlane could be lost at the hands of its video albatross.

Tread lightly, Google, you never know when YouTube may come up and bite you.

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Update1: I had the opportunity to speak with Google today to clarify a few sticking points with YouTube and this deal. According to the company, MacFarlane's content will be featured on a dedicated YouTube channel and some revenue will be shared between him and YouTube. The New York Times has yet to update its article with this integral fact, but it should be noted that YouTube will get a cut of this deal.

The videos themselves are YouTube videos, and they will live on a YouTube brand channel," Daniel Rubin at Google told me. "The syndication across the Google Content Network of this content operates identically to the way in which we syndicate other YouTube videos as AdSense video units. So, just as other YT content creators generate revenue from their content by having their videos bundled with ads, so too will MacFarlane generate revenue from the branded manner in which his videos are placed on AdSense publisher sites." "What's interesting about this deal is that it is branded entertainment: a deal that connects Seth's content with a specific brand advertiser. Further, this deal demonstrates how YouTube partners can generate revenue and increase distribution of their content via the Google Content Network."

I've asked Google to come on my CNET Digital Home podcast to discuss this deal and YouTube itself to give it the opportunity to tell us about its plans for the future and turning this important business segment around. I'm waiting on confirmation. If/when I get that, look for another update here.