Here’s a beefy Mercury News article about online video, with an emphasis on YouTube and its long journey toward profitability. It confirms that the YouTube folks are indeed thinking it would be good to make money, but are (in my opinion) way too paranoid about losing their cult-like appeal. Read my letter to YouTube’s founders to get more rants on this.

See the chart to the right for the latest visitor counts of the big video sites (which has YouTube’s unique visits higher than the combined share of the second two players- MySpace and MSN).

I don’t really count MySpace since it’s a zillion little sites, and MSN because we’re talking mostly about news. So the battle for viral videos really is between YouTube, Google, AOL and Yahoo. Second-tier sites (Break.com, Heavy.com, MetaCafe, iFilm and Atom) look small here, but 3-million unique visitors in a month is significant.

The smaller sites that pay video creators aren’t included in this Nielsen report, but to read about those, see this post.

Interesting quote from the Mercury News article: Tony Perkins, editor of the Always-On Network and founder of Red Herring magazine, believes YouTube critics are missing a massive behavioral shift:

“There is a new reality out there,” he said. “Consumers are voting very loudly that they enjoy content that is produced by amateurs and people they know.”