Google is closing its online video store, Google Video, this week, having launched the service in beta in Jan 2006. When the service, which enabled customers to rent and buy online videos, was launched, Google said it would grow into a thriving marketplace where video producers could sell or rent their work. According to Forrester Research analyst, Charlene Li, Google Video failed due to the service's concentration on video rather the community around video, which YouTube successfully focused on. Google Video, the company says, showed that people would rather get online video for nothing even if they have to watch some ads. The search giant says it is not viewing Google Video as a failure, but as a trial that demonstrated the best way of approaching online video. When it purchased YouTube in Nov last year, Google said the two sites would co-exist, with Google Video becoming a tool to search the internet for video and YouTube a place where people post, watch and talk about videos. Google spokesperson, Gabriel Stricker, claims the change reaffirms the company's commitment to building ad-supported models for video.

Although the extent of the venture's failure is unknown, because Google never released sales figures, some analysts believe its fate was sealed by the service's inability to offer videos which could be viewed on customers' TVs or handheld devices. Data from ZDNet Research indicating that less than 2% of US web surfers buy video content online appears to show that consumers are unwilling to spend money on videos, which they can only view on relatively small computer screens. Consumers are possibly also put off buying online video by poor download speeds. Amazon and Microsoft have also launched online video download services, but these services offer videos which can be watched on TVs and handheld devices, like iPods. Forward to colleagues