Is Google (NASDAQ:GOOG) finally about to put its billions to work by buying its way to the top in online video? A report coming out of The Wall Street Journal online claims that talks have advanced between Google and the popular YouTube site, with a price tag of about $1.6 billion being bandied about. The speculation originally surfaced last night in a TechCrunch blog entry that was titled "Completely Unsubstantiated Google/YouTube Buyout Rumor."

Yes, Google is good for the money. The search-engine giant's balance sheet is flush with $9.8 billion in cash and short-term investments. If anything, it's surprising that Google hasn't been as aggressive as its online rivals and media conglomerates in acquiring key Internet properties after tapping the secondary markets for greenbacks a couple of times since going public in the summer of 2004.

With the exception of doling out $1 billion for a 5% stake in Time Warner's (NYSE:TWX) AOL, Google's purchases have been mostly small, technology-based upstarts. It let News Corp. (NYSE:NWS) walk away with MySpace. It didn't seem to care that eBay (NASDAQ:EBAY) was snapping up Skype. We can't say that Google has been asleep at the wheel, but if these buyout rumors are true, it's safe to say that Google is wide awake and hungry now.

The knocks on YouTube have been the problems of monetizing video streams, as well as the battle against content providers who often have their copyrights violated through unauthorized uploads. YouTube has turned to a variety of advertisers, including Google, and media sponsors to help cash in on its popularity without having to pad its videos with actual visual ads. What we don't know is whether that will be enough to offset the high costs of running a video site in the first place. Last month's deal with Warner Music Group (NYSE:WMG) was a good step toward getting content owners on YouTube's side, but in the end it will only mean more mouths to feed.

However, Google needs YouTube even if it's not an instant cash cow. It recently replaced the Froogle tab on its landing page with Video. That makes it a high priority for Google, and it can't afford to fail. Google Video is a nice try, but it's no YouTube. Snapping up YouTube would have Google in the clip-culture driver's seat with an online sensation that is serving up well over 100 million videos a day. In Google's mind, its success with its AdWords program proves that if anyone has the muscle to monetize something, it must be Google. In the past, that meant striking up ad deals. However, with buyout binges taking place in the boardrooms of many of Google's competitors, the best way to guarantee an ad partner seems to be to swallow it whole.

Good luck, Google. I guess we'll all be watching YouTube to see if any news breaks over the weekend.

Time Warner and eBay are Motley Fool Stock Advisor recommendations.

Longtime Fool contributor Rick Munarriz is a huge fan of Google, and it would be his home page if it weren't for taking up that piece of real estate. He does not own shares in any of the companies in this story. The Fool has a disclosure policy.