Why would Google want to own two video sites? Oh, silly. They’re not two video sites. Their differences are becoming apparent:

Google Video

• Objective: create a video site with no discernible character or features. Keep it as an entirely different entity, and let it stagnate as the market changes. Don’t promote the video site on Google homepage until emerging player has surfaced.
• What it Could Have Been: The one-stop shop for all videos (just as it is for content and images). A great search tool for any video on any site. The king of linking video content to relevant ads. A way for small creators to distribute content and get paid a portion of the ad revenue. Turns out, however, TechCrunch is reporting Google Video will hoard ad revenue unless you’re the media elite.  I’m really disappointed about that… those of us with less than 1,000 hours of video content will have to look elsewhere.
• Target Content: Stuff you can find on cable, television, video on demand or your local Blockbusters… brought to you by fat guys with cigars.

YouTube

• Objective: Invent an easy way to share videos, which evolves organically into an incredibly popular community of viral content…  mostly stolen from television and posted in direct violation to copyright laws. If you get objections, blame the submitters, and provide their home phone numbers when lawyers call.  
• What it Could Have Been: A new distribution channel for video creators that have great imaginations but low budgets. A method by which “big media” could promote and discover new talent. A bridge between “lean forward” and “lean back” television– connecting with networks and bandwidth providers to change television.
• Target Content: Anything ripped from any source. Until the attorneys come. Then it will be mostly videos of stoned skateboarders, babbling teenagers and commercials masquerading as “viral videos.”

It’s a great day to be a smaller online video site with lower costs, greater revenue sharing and content you’re allowed to post. Watch the Revvers, Metacafes and Brightcoves. They’re meeting unmet needs and will be spending money on ad representatives instead of attorneys. They’ll also forge partnerships with surprising companies that will change our view of the landscape.

As YouTube is cleansed and commercialized the small creators will follow the money, and the eyeballs will follow the creators.