According to TechCrunch, Google is in talks with YouTube, finalizing an acquisition deal that would put YouTube in the hands of Google for a mere $1.6 billion dollars. So why would either party be interested in such a deal? Google has about $10 billion in cash on hand, while YouTube has significantly less, and is quickly burning through its stash with extrodinarily high bandwidth bills each month. YouTube also has a massive audience that Google’s advertisers would l-o-v-e to tap into via AdWords. Such advertising would also significantly increase profits for Google, as well as investor confidence in the company.

Other reasons for Google’s interest YouTube include wanting to keep it out the hand’s of its competitors, who have expressed interest in acquiring the company in the not-so-distant past. Viacom, News Corp., Yahoo, and Microsoft are all said to be interested in YouTube.

Google already has a video service, dubbed “Google Video,” which ranks third amongst the major online video services. It is unclear if this acquisition occurred, whether Google Video and YouTube would meld together into one, or remain seperate entities.

Neither Google or YouTube has confirmed or denied the rumors. The rumors apparently came from a reliable, undisclosed source who contacted Michael Arrington of TechCrunch fame.

Analyst Robert Peck of Bear Sterns described in a report for clients, a new feature that Google will be rolling out in time for the holiday season. The new product is based off of Google Base, a service Google launched last October that many believed was taking a direct shot at eBay.

Google also plans to de-emphasize Froogle as a stand-alone product, and integrate it into other search products. Its listings would instead be absorbed by other search features (perhaps Google Base?).

The new feature hasn’t yet been fully disclosed, by either Peck or Google. Google has declined commenting on the report, however, it is believed that the new feature will rattle a number of electronic merchants, including eBay who has dedicated a significant amount of time ensuring that their listings appear in Froogle search results. As Froogle’s exposure declines, so does the ability of eBay to benefit from the Froogle listings.

A spokesman from eBay said that just as the work to make sure eBay listings appear in Froogle, the company is sure to do the same with the new Google Base set-up, should it occur. Apart from that, he declined to comment any further.

Google is expected to unveil its long-anticipated online payments system later this month on June 28, according to an analysts report.The service, dubbed “GBuy”, will process payments between shoppers and merchants. Eventually, it might also expanded to include consumer to consumer payments.

“GBuy has the potential to be as important to Google as Google Maps, or Google News, and there is very little that competitors can do to thwart its success,” says Jordan Rohan, RBC Analyst.

The product will launch in “beta” phase, and during this period Google will not charge merchants service fees. Further down the line, Google will most likely institute a 1.5% to 2% fee for transactions, which is similar to or slightly less than what rival Paypal charges.

On search result pages, Google will designate each merchant that accepts GBuy as a “Trusted GBuy Merchant”.

Google will benefit from the service not only monetarily, but also by their access to new information. The payments system captures all transaction data flow, allowing Google to see which categories and keywords produce the most hits and sales.

Analysts predict that GBuy could be “revolutionary”, driving more precise targeting in future searching. And although GBuy looks to be in direct competition with Paypal, Rohan believes that in the short term GBuy is more negative for eBay than it is positive for Google. Longer-term, it could be a game-changer.”

The past few weeks have brought us several new developments, rumours, and a new acquisition.

Screenshots of the long rumoured Google Calendar application have finally surfaced online.  The application is being called CL2.  A log-in screen for CL2 is available on Google, although you cannot yet access the application.  Those who have seen it thus far are very impressed, and it has sparked further rumours that Google may be able to compile a large events database with CL2.

A Powerpoint presentation shown at the recent Google Analyst’s Day meeting has mentioned a new Google product that is currently in development – Gdrive.  Gdrive is to be the ultimate online storage solution for individuals with unlimited capacity.  It will give users the ability to store information that they now store on their computers online so that they can access their files from anywhere at anytime.  It promises to be more secure than storing the files on your own computer.  A PDF Version of the Powerpoint presentation is available online.  The Powerpoint version was available for a short time before Google removed it.  The PDF Version is missing some important (and revealing) notes that were seen on the Powerpoint version. However, you can read others comments about it here.

On March 9, Google confirmed that they acquired the online word processor, Writely, another start-up company.  To many, this confirms the rumours that Google is developing an online office suite.

Google also confirmed that they are working on expanding the Google Payments/Purchases system.  So far, they have added purchase capabilities to Google Base listings.  With your Google Account, you can now purchase things on Google Base much like you can on eBay. Google also added another feature to the Purchases service, you can now leave a review of the seller.

And finally, Google rolled out a mobile version and Hebrew version of Google News.  Stay tuned for all the latest updates, news, and rumours!