Potential deal valued at $1.6bn

Reports have begun to surface suggesting that Google is in talks with video-sharing site YouTube over a possible acquisition.

The rumoured deal has Google paying $1.6bn for YouTube, according to The Wall Street Journal.

If completed, the purchase would give Google roughly half of the streaming video market.

Some experts are already speculating on what such a deal could mean for both companies.

Charlene Li, an analyst at Forrester Research, said that YouTube's willingness to incorporate user opinions, comments and links into its video pages is one reason why the site pulls in so many viewers, and why it is so attractive to larger firms.

"YouTube is a gem because it figured out what Google, Yahoo, MSN, AOL and all the other video players in the marketplace could not. It is not about the video, it is about the community around the video," Li wrote in her blog.

The analyst also believes that YouTube's impending legal troubles could give it a reason to tap into Google's vast financial and technical resources.

"A copyright holder would be much more likely to negotiate and partner with Google than a start-up like YouTube," wrote Li.