The point is that they had to buy youtube, not that they weren't able to put a shiny interface on top after they bought it.
What I'm trying to get at is, imagine if Microsoft bought youtube before google could - given Google's track record with their own video search, they would not have been able to compete with youtube, and they would almost certainly have simply lost that market. I think that's what happened here. Google is amazing at algorithms, but has very little business sense...they can buy a successful product, but rarely create one of their own.
What I'm trying to get at is, imagine if Microsoft bought youtube before google could - given Google's track record with their own video search, they would not have been able to compete with youtube, and they would almost certainly have simply lost that market. I think that's what happened here. Google is amazing at algorithms, but has very little business sense...they can buy a successful product, but rarely create one of their own.