Google Put a "Hit" on YouTube?

I had lunch with two attorneys last week (the good news was that they paid -- and it was a sushi restaurant). One of the attorneys said: "Hey, Google has video now. I want to see if I can find some Van Halen music videos."

Yes, my attorney friends are not of the MySpace generation. I said, "Actually, Google has had video for quite some time."

"Oh," he said. "I thought it came out today because the menu on the top of the front page changed."

That was certainly correct. One of the most valuable pieces of Internet real estate had an adjustment last week. The links to Froogle and Groups are now gone. In its place is "Video New!"

Basically, this is a declaration of war against YouTube, an upstart that now dominates online video. Hitwise, which measures and analyzes Web traffic, looked at the impact of the menu change. Of course, Google Video saw a doubling of traffic.

As I noted in a recent piece for BloggingStocks.com, Google is leveraging its huge distribution -- such as AdSense -- to take on YouTube, as seen with its recent deal with MTV. Basically, online video looks like the next hyper-growth market for advertising. And it's something Google must win at all costs.

Here's the Hitwise's chart on the spike in traffic for Google Video:

Tom Taulli is the author of a variety of books, such as The Complete M&A Handbook (Random House) and operates InvestorOffering.com.