Rumors of a Google acquisition of YouTube, which started at the TechCrunch technology blog, have run wild over the last few days.

The Wall Street Journal followed the TechCrunch post by reporting that Google is in talks to buy the popular video-sharing site, citing the TechCrunch blog and a person familiar with the matter. Since then, the rumors have been picked up by The Mercury News, Business Week and the Chicago Tribune.

Neither Google or YouTube would substantiate the rumor.

While there are plenty that think “GooTube” would be moronic, there are also plenty of reasons why Google should be interested in YouTube.

YouTube has gone from nowhere to being the leading video site in one year. During the same time, Google Video has had a lackluster reception, despite prominent promotion at one of the hottest locations on the Web:

Google, while best known for search, makes its money from the company’s dynamic ad technologies. Google’s revenue growth depends on finding new places to put ads. The company has been working hard to duplicate its success in Web advertising with video and television.

Google has done a tremendous amount of research into AdSense-like technologies for video. Earlier in the year, they even published a paper documenting a system for dynamically presenting television viewers with related information.

The system “listens” to the audio from television or other video, analayzes it, and can present additional contextual information. If you were watching a travel show about Florida, the system might display the weather for Florida, ticket prices for flights to Orlando…..or perhaps an ad for Disneyworld.

The main objections people have to the GooTube idea are the rumored $1.6 billion valuation for YouTube, and the potential legal liabilities that Google would assume if it purchased the company.

Critics of the idea may be making too much of these objections, though. If any company is in a position to make money from the tremendous number of viewers YouTube has, it is Google. Google has become the dominant force in Web advertising, and their biggest stumbling block in expanding into video has been the lukewarm reception of Google Video.

The legal liabilities, though, are another matter. Much of YouTube’s value for viewers comes from the abundance of clearly infringing copyrighted material that has been posted to the site. Much of this material is unavailable anywhere else online, in part because of the morass of legal issues involved in repurposing video for the Internet. Google would have to figure out a way to filter out this material and deal with the user backlash.

Alternately, Google may be looking for a financial arrangement that could benefit both companies, while minimizing Google’s legal exposure. Google benefits from displaying its ads on spam blogs and other questionable content. If Google delivered an AdSense for video to YouTube, it might be able to create a very profitable arrangement while avoiding becoming the RIAA and MPAA’s biggest target.

Another issue Google could have to face is dealing with the fact that some of the most popular original content on YouTube is videos of very young women. Take away the ripped DVD content, the music videos and the captures from tv shows and you’ll find that young female vloggers, aka hot chicks doing stupid sh**, make up much of the top content at YouTube. Videos by Emmalina, Brookers, lonelygirl15 and many other young women are some of the most popular videos at the site.

If Google were to purchase YouTube, it would have to deal with the awkward reality that there’s a prurient quality to much of this content. Google isn’t known for being particularly edgy. For most people, the company’s “wild side” is limited to the occasional holiday version of the Google logo. Because of this, it’s hard to imagine Google effectively promoting much of the content that has made YouTube successful.

It’s too early to know if the GooTube rumors will pan out, or if they’ll join the likes of the perennial iPod phone.

It’s clear, though, that YouTube would offer Google tremendous opportunity; what’s not so clear is how Google would deal with YouTube’s risk.