Youtube is no doubt the most popular video website ( among top 5 in alexa ) and google was holding itself from cashing the popularity even after paying nearly $1.65 billion for the acquisition. Advertisement free environment in Youtube also played a vital role in making the service more popular.
But now google has decided to earn some more cash by adding overlay adds to the video as reported by newyorktimes. Quoting the article , this is how it will be done so as to be unobtrusive and at the same time keep users in control of what they see.
The ads, which appear 15 seconds after a user begins watching a video clip, take the form of an overlay on the bottom fifth of the screen, not unlike the tickers that display headlines during television news programs.
A user can ignore the overlay, which will disappear after about 10 seconds, or close it. But if the user clicks on it, the video they were watching will stop and a video ad will begin playing. Once the ad is over, or if a user clicks on a box to close it, the original video will resume playing from the point where it was stopped.
Well !! who would like to watch an advertisement before watching the video they were interested in ?? I think the better option could be showing the advertisement in the last 15 secs of the video where there is lot more chance for the user to view it as a related video 
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But the article states in the end that :
In tests, YouTube users had clicked on overlays five to 10 times more frequently than on banner ads that already appear on some YouTube pages, Ms. Naughton said. Yahoo has also been testing overlay video ads, creating further momentum for the format
This service is still in testing phase. I am sure Google would surely like to extend this service to the normal video uploaders also and help them making money with youtube videos. Well, recently one more video service called megavideo claimed that it beats youtube. If you read the article, the only difference was to allow the uploaders to make money online by upgrading to a premium account by paying nearly 10$ per month. Once this service is launched for video uploaders in Youtube, I think megavideo will never be able to beat youtube. I hope Youtube still maintains the quality of the video content by doing what is mentioned keeping user experience the topmost priority.
You can read more about this at newyorktimes.
Any comments 
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1. Work
2. Be less intrusive, yes?
BTW Great site.
Moreover, featured videos section in youtube must be contributing to some income for google . But I think google is not getting that much profit coz of the amount of space and kind of bandwidth which is required for the site like Youtube. Hence, they have come up with some creative idea like these adds.
But mostly advertisers are not gonna pay if the cost is high ..they will upload their own video and push it in featured video section where the video appears on the front page.
Anyway unless youtube is gonna roll out this feature for uploaders also , I will call google damm greedy and