• Los Angeles Times, Thursday, November 13, 2008 11:31 AM

At the beginning of 2008, one of Google's stated objectives was to finally eke out some meaningful revenue from YouTube. And while the search giant has been actively pursuing content and advertising deals for the enormously popular video-sharing site, none of its moves has yet to hit pay dirt. On Wednesday, Google introduced a new auction-based video advertising system, that's not dissimilar to the one it pioneered in search, which promotes sponsored video clips alongside regular YouTube search results.

Is this the move that finally makes YouTube profitable? It could be: YouTube, after all, has recently become the Web's No. 2 search provider, after Google itself. "What we're trying to do is bring the best parts of Google and the best parts of YouTube together," said Matthew Liu, product manager for the service, called YouTube Sponsored Videos.

The new sponsored video program lets advertisers create ads and bid for placement alongside certain keywords through a new self-service Web site modeled after AdWords. YouTube says the system "levels the playing field" by making the ads available to everyone from individuals to small businesses and major brands. In testing conducted over the last few months, advertisers said the trial campaigns they ran were more effective than banner ads and even some search ads. That said, the prices were dirt cheap, as few advertisers were invited to the test, which meant that popular keywords like "iPhone" were going for 10 cents a click.

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