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Ever since YouTube’s CEO Chad Hurley participated in Herb Allen’s annual Sun Valley media mogulfest, there has been much speculation about who will acquire the young online video phenom. If the chatter in the blogosphere is a reliable indicator, many believe it will be Rupert Murdoch.

After all, with MySpace under his belt, it’s certainly logical for him to want to combine his 80% market share of social networking with YouTube’s 60% market share of online video… giving him clear dominance within the rising social media industry. But it’s not likely to happen, and here’s why.

If rumors are true and YouTube is valuing itself at $1 billion, they have essentially out-priced themselves for Murdoch. As I experienced personally when I negotiated the sale of Delphi Internet to Murdoch, he prefers to use hard cash as his deal currency, not News Corp stock (maintaining his ownership interest and avoiding dilution are key drivers). Therefore, the prospect of laying out $1 billion in cash for an operation with negative cash flow, particularly after spending nearly $600 million for MySpace, is a highly unlikely scenario. And even he wants to, Wall Street won’t let him risk his balance sheet without repercussions.

The only practical way for Murdoch to go after expensive deals like YouTube or FaceBook would be to create an alternative form of currency… by spinning off Fox Interactive Media (“FIM”). With FIM publicly traded, he would then have the currency to do such bubble-type valuation deals on an apple-to-apple basis. I’m sure Murdoch would love to have YouTube, and it must be frustrating to have your hands tied.

For this reason, I would attach a very high probability of an FIM spin off. So with Murdoch effectively out of the picture in the near term, which of the other media conglomerates like Viacom/MTV or the Internet giants like Google are possible suitors. From the perspective of Wall Street, the most likely contender is NBC Universal.

With parent company GE sporting a market cap of $340 billion, structuring a billion-dollar deal, using stock as currency, is actually quite feasible. In fact, I would even go as far as to say that NBC’s recent promotional deal with YouTube is essentially a form of due-diligence for an acquisition.

Robert Young is a serial entrepreneur who played a major role in the invention & commercialization of the world’s first consumer ISP, Internet advertising (pay-per-click ads), free email, and digital media superdistribution.