Venture capitalists are salivating over the possibilities now that the first online video sharing site has been purchased for a respectable sum. They should be excited about the possibilities. The Deal's David Shabelman gauged the reaction to Sony's $65 million purchase of Grouper this week. Here are the highlights:

Bill Burnham - San Andreas Capital LLC

"Once someone exits the theater, everyone else thinks about heading toward the door. The remaining guys are playing a game of musical chairs, but there's more startups than there are chairs at this point. These guys are obviously smart — they made a bunch of money selling Spinner to AOL. They're experienced entrepreneurs, saw the train wreck coming and decided to get off at the next available stop."

Kevin Covert, - Montgomery & Co. (the investment bank that represented Grouper in the deal)

"This is the beginning of the consolidation, and there's no question there will be more transactions like this. You have a huge group of people sharing and creating video content, and that's what these media companies do." Covert said he expects YouTube to be acquired in the next 12 to 18 months. "YouTube is a great company, but it's not a great [initial public offering] candidate. It's more of an acquisition candidate. IPOs have to show scalable businesses and growth. Right now YouTube only has promise."

David Hornik - August Capital

"I don't think there's any question that the most successful sites that are managing online video will not have problems making money. The real question is which technologies and experiences are the most compelling to users and get the most mindshare. They'll get a disproportionate amount of the economics."

Tags: grouper, web2.0, sony, youtube, vc, venture capital.