Google has a problem.

It’s got the biggest video destination on the Internet – YouTube – but it’s struggling to find a way to make money with the site.

Meanwhile, Hulu is “kicking YouTube’s ass”, and building a business on long tail video that’s advertiser-friendly.

Google’s problem, in a nutshell, is the fact that most of the content on the site is either content ripped from copyrighted sources, or it’s stuff like Teleporting Fat Guy:

Teleporting Fat Guy is what a successful YouTube video looks like. It’s original, it’s viral and it racks up hundreds of thousands of views a day.

But it’s also content that most advertiser don’t have any idea what to do with.

Here are the lyrics, in case you missed anything:

Teleporting, teleporting, teleporting fat guy
Teleporting, teleporting, teleporting fat guy

I came back from time, I got my power glove
Burt Reynolds stole it from me, I got it back
Teleporting fat guy
He’s teleporting, and he’s so damn fat (Yeah I am!)
Teleporting fat guy

Teleporting, teleporting, teleporting fat guy
Teleporting, teleporting, teleporting fat guy

Punched Burt Reynolds right in the face
Made him look like such a disgrace
Cause I’m the teleporting
Teleporting fat guy,
Punch you in the fat, guy
I’m from outer space
Teleporting fat guy
Teleporting fat guy

People’s attention is moving to Internet video fast, and advertisers haven lagged behind, because people are spending their time watching things like Teleporting Fat Guy and Fred.

Google says figuring out how to make money off this user-generated content is its biggest challenge.

This challenge, isn’t limited to YouTube, though; it’s the biggest business opportunity in user-generated media.