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"Two kings have got together and will be able to provide an even better service and build even more innovative features for you," says YouTube co-founder Chad Hurley in a to-camera piece on his own video-sharing site, before he and Steve Chen, the other founder, go into a fit of nervous, computer geek giggles. But these two have the right to be happy after Google, now famously, acquired YouTube last week in a $1.65bn (£880m) all-share deal.

Yet, the massive amount Google has paid for the site has caused national newspaper commentators to hark back to the days of the dotcom crash, when astronomical sums were paid for young unproven start-ups. How will the search help monetise YouTube, if at all, and will any corporate interference ruin the anarchic, personal feel it has made its name on?

Suranga Chandratillake, founder and chief technical officer of video search engine blinkx TV, believes that Google's "single biggest reason for buying was search advertising".

Joanna Shields, director for partnerships at Google EMEA, insists the acquisition "is at the core of what we do", citing the deal this August with MySpace as another example of "an existing opportunity of monetising user-generated content".

She adds: "Advertising will be a major source of revenue. It is a compelling media platform for users, content owners and advertisers."

Right noises

What form of advertising this will take is still not clear; it is still testing advertising models for video, though so far has held back from using in-stream advertising in the testing phase of its own product Google Video.

Certainly, Google is making the right noises about branching out from its core in search advertising. Last week, the company announced that part of its best practice funding system for remunerating agencies was to include a 10% "kicker" for non-search advertising. But there are some who question whether Google's main incentive in buying YouTube was to increase display revenues. Chandratillake cites a defensive element to the buy. A rival buying YouTube means Google would have missed out on providing search for the massively popular site or would have had to sign another deal like the one with News Corp's MySpace, which cost $900m.

Content provision

Jupiter Research senior analyst Nate Elliot believes Google's acquisition, though perhaps the right move, is an admission of defeat by the search engine, which launched Google Video earlier this year. "They started at the same moment in time, with the same strategy. Google has the brand and capability to drive endless traffic, yet YouTube is by far the largest video site online."

Defeated yes, but Elliot can see the synergies between Google and YouTube, in terms of content provision. Last week, YouTube was not only in the news for the Google takeover, but it also agreed partnerships with content providers CBS, Universal Music and Sony BMG, adding to an existing partnership with Warner Music Group.

The Google Video and YouTube brands are to stay separate for the time being and Elliot suggests Google could make the most of these brands by making Google Video a place where consumers could buy premium content "while YouTube could be consumer focused with free content". Either way, Google is positioning itself as a content provider with a wide-reaching distribution platform.

Another issue for Google to contend with is retaining the ethos of controlled anarchy that has made YouTube such a hit. YouTube, which has been accused of flouting copyright laws, has been dealing with the issue by immediately taking down any video after receiving a complaint, and Google insists it will continue to be vigilant about any infringement of copyright laws. With content providers like Universal Music signing up with the search engine, maybe the copyright controversy will go away, but whether YouTube will retain its popularity is a different matter.

As Ed Ling, strategic development director at I-Level, points out, like the News Corp acquisition of MySpace "it almost legitimises it". People questioned whether News Corp's commercialisation of MySpace would drive people away and now the same question is being asked of YouTube. It would explain the video site's reluctance so far to dive straight into the interruptive model of advertising. For Google's part, Shields will not be drawn on the subject of YouTube losing credibility, but repeats the Google mantra: "I would say the mission is to organise the world's information and we are building the best, broadest database of content we can."

With convergence around the corner, this collection of content will be very powerful. Ling poses the question: "In the future of the 'million channel EPG', where consumers want video, text or sound from once source, where are you going to go? You're going to go to the trusted search engine." If Ling is right, maybe YouTube was worth the price.