The New York Times followed up on the news of Google's acquisition of YouTube with a story pointing out how Google and a number of Silicon Valley startups are putting pressure on Yahoo. Nothing new there. What's interesting is the report that Yahoo was in advanced negotiations with YouTube before Google swooped in and closed the deal.

Its slightly inferior search engine and poor online advertising interface has left Yahoo with almost a third of as much cash as Google and about a fourth of as much market value. This reality limits its ability to get deals done. It's one thing to spend 1.2% of your shares on a promising online video startup, another to spend 5%.

Despite its failure to snare YouTube, Yahoo remains dedicated to using corporate development to grow. Toby Coppel, Yahoo's senior vice president of corporate development, said last week at The Deal's Silicon Valley Summit that the company has had a "balanced approach to growth" over the last five years. It's bought a number of early stage companies with talent or technology, bought large companies such as Overture for market share, expanded overseas via deal such as its investment in Alibaba last year, and bought back $1 billion worth of its own stock to improve shareholder return.

That approach of doing whatever makes the most sense to strengthen the company's value remains, said Coppel. And despite not doing any large deals in the past year, the speculation about Yahoo's involved in the YouTube negotiations and its reported talks with Facebook, confirms that the company is not afraid to cut large checks.

But, I don't think it's future will be determined by its ability to purchase this social network or another. Yahoo already has expertise in that area with Flickr, Delicious and a slew of other internal projects. Yahoo must sort out its advertising system so that it can start generating a similar amount of cash that is really powering Google's surge.

For more reaction to Google's $1.65 billion acquisition of YouTube, see:
The New York Times
Poynter Online
Michael Parekh
Wall Street Journal

Tags: yahoo, svsummit, svsummit06, vc, venture+capital.