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The latest news: Google Video will soon be discontinued.

“Google Video was a failure,” said Charlene Li, an analyst with Forrester Research (quoted by the Los Angeles Times). “They focused on video while YouTube focused on the community around video.”

Indeed, YouTube’s runaway success in the video-sharing market is looking more and more untouchable every day. But is Google Video a casualty of YouTube’s popularity, or is its demise a direct result of its own decision to focus more on selling and renting videos?

It was originally thought that Google Video would appeal to those who are willing to pay more to avoid ads embedded in the videos they watch. Alas, “it was just clear the audience was more interested in free,” Larry Kramer, former president of CBS Digital Media, told the Los Angeles Times. “But they were also willing to watch ads. Nobody knew that was going to be the case.”

Either way, those Google Video members whose paid accounts are being liquidated are likely to be upset.

“The problem with shutting an underperforming service down,” reads coverage of the story by Europe’s Tech Digest, “is that even though it doesn’t have enough users to justify keeping open, the few users it does have will be mighty fed up with you. … Anyone who bought videos from the site since its launch won’t be able to play them any more after this Wednesday. ‘After August 15, 2007, you will no longer be able to view your purchased or rented videos,’ says an email to customers.”

The silver lining for Google? It also owns YouTube. In retrospect, it seems sensible that Google would eventually shut down one of these services, which essentially are in competition with one another. And in the age of YouTube, perhaps it should have been obvious from the beginning just how this all would end.