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YouTube is currently making headlines as it announced earlier today that it is continuing its stable rise in traffic and just hit a landmark 1,000,000,000 daily views, three years after its controversial acquisition by Google.

As the anniversary got closer, Google CEO Eric Schmidt has shed some light over the astonishingly high price — US$1.65 billion — that the search giant offered to pay for the video website, which was already gaining momentum but was valued as worth much less.

In a deposition that was part of the legal proceedings for a $1 billion copyright lawsuit to YouTube filed by Viacom, the CEO revealed that the popular video site was valued at “somewhere between $600 and $700 million,” and that he eventually managed to convince the board of executives to pay a $1 billion premium to fend off possible offers from competitors.

At the time, the deal was widely criticized by analysts, which agreed that the “big G” had paid too much for a company that didn’t even turn a revenue. Not much has changed ever since, as Google has repeatedly claimed that Youtube is currently turning a loss of about $1 million every day despite all efforts to include as much advertisement as possible on the site.

But while the accountants might say that this wasn’t a good move, the 1 billion daily views mark for what is probably the most visited site in the world has more than just a financial value for Google: it allows the Mountain View, California giant to benefit from integration with search and direct to one of its properties a very considerable number visitors. In this sense, one might say that the deal was a success.

“Three years after the acquisition, our platform and our business continue to grow and evolve. We are still committed to the same principles that informed the site early on, but we know things have changed. As bandwidth has increased, so has our video quality,” YouTube CEO and co-founder Chad Hurley commented on YouTube’s official blog.

From a repository of short video clips to be shared with friends, YouTube has in fact grown to much more, hosting anything from Stanford University lectures to official channels of a number of first-order figures, from the Pope to the President of the Unites States.

Hurley credited the site’s success, among other things, to his team’s commitment that videos should load and play quickly, and be hosted on an open platform. “We wanted to create a place where anyone with a video camera, a computer and an internet connection can share their life, art and voice with the world, and in many cases they can make a living from doing so,” he continued.

To try and be profitable, YouTube’s latest move was to negotiate deals with movie studios and other partners in order to offer more content considered attractive to advertisers at a time in which this market is stalling.

For instance, it announced just a few days ago that the 1976 movie “Taxi Driver” by Martin Scorsese, starring Robert De Niro and Jodie Foster, was made available for US viewers. And even though the company still has to turn a profit, analysts agree that that moment is getting closer every day.