Ok, so it’s $1.6 billion in Google stock, but it’s still a massive endorsement of a speculative venture which is less than 19 months old and has less than 60 employees. The purchase of YouTube means that Google has bought off the only real competitor to its own webvideo venture, Google video. It also means that the fledgling venture has the massive resources of the search engine corporation behind it in its legal struggles with the media companies who have been threatening to close it since the inception of the video sharing site. With its imperative slogan of "Broadcast Yourself" the site has also brought the notion of the Web2.0 revolution to the general public around the world.
An excellent video history of YouTube has been compiled by Paul Boutin on Slate.