Morgan’s posterous

But even better news: CEO Eric Schmidt says that not only are things turning around (or at least “largely stabilized”), but YouTube will soon enter the realm of profitability. (Or, as one company I worked for optimistically called this, “making the push to cash positive.”)

Senior vice president Jonathan Rosenberg said monetized views on YouTube have more than tripled in the last year. The most popular video website on the Internet will be “a very profitable business for us” in the “not too distant future.”

One of the biggest knocks against online video has been that you can't make money off of it. Well Hulu has shown that you can, in fact, make money off the medium and that advertisers are willing to pay to associate with high-quality video content. YouTube has started finding ways to monetize content as well by focusing on high-quality, professional content.

Still, online video has a long way to go. Advertisers still haven't found an elegant way to reach customers in a manner that is more in line with the permission-based ethos of the Web. I believe that video will really take-off when we find a way to create compelling content that is sponsored by brands in a way that works for both brands and the audience watching. Then we'll be able to rid ourselves of annoying ad overlays, pre-rolls, interstitials, and other types of interruption advertising.

Think about product placement as a crude form of the initial foray into this realm. While often inelegant and not integrated in a way that online allows, these product placements represent the first in sponsored content in video. Other media has found a way to incorporate sponsored content as well, the advertorial content advertising seen in magazines is another example. Lately brands like Carl's Jr. has been using YouTube stars to create video content that is centered around the brand but is a unique creation by the star.

We'll see this idea of sponsored video content continue to evolve as online video matures as a medium. Where do you think it goes from here?

Note: I work for TurnHere, an online video production and advertising company that creates sponsored content for brands. The opinions in this post are my own and not necessarily those of my employer.