Google hasn't released any official financial information about YouTube's finances, but Barclays Capital director Anthony DiClemente estimates the user-generated video site will generate $1.6 billion in revenue this year.

YouTube is uniquely positioned here as it is by far the most watched online video property with 161 million unique viewers in September, DiClemente said.

If DiClemente's estimation is correct, YouTube's revenue now equals exactly what Google paid for it five years ago ($1.65 billion), but more importantly, it means YouTube owns about 80 percent of overall Web video revenues, which is a staggering figure. DiClemente believes the whole market is worth about $2 billion.

DiClemente's estimates are likely a bit off, given that Hulu, a competing site, said it will make more than $500 million in 2011, with the majority derived from advertising. Therefore, DiClemente and Hulu can't both be correct; otherwise, there would be no room for video ad spending anywhere else in the world for all of 2011, which is highly unlikely.

Yet, even if YouTube's 2011 revenue is in the ballpark of $1.6 billion, it's still a very big deal.

YouTube recently announced that it will team with dozens of Hollywood partners to provide original programming starring celebrities like Jay-Z, Ashton Kutcher, Shaquille O'Neal and Madonna. The plan is to attract big-time advertisers to sponsor these channels; even if DiClemente is right and YouTube is making $1.6 billion this year, the company is likely trying to disrupt the next biggest industry: cable television.

While we do not believe this is an immediate threat to studios, content providers or distributors just yet, we do believe this is Google's first step toward providing a more robust platform for professionally produced independent content, and believe the move positions Google to act as a distributor in a bid toward capturing incremental ad dollars that are traditionally directed toward TV, DiClemente said. 

In 2010, cable advertisers reported $27.2 billion in revenue while the entire cable industry reported  $93.7 billion. YouTube likely realizes its unique position as the most-watched site on the Internet. If its channels can provide original content with big name celebrities, it might be able to generate revenue at the same magnitude as some cable companies.

While it may eventually find itself on equal footing with cable providers, YouTube will not take viewers away from cable. People will continue watching television, and while it's not as cheap as YouTube, it is an institution. Viewers are faithful to specific niche channels, as well as the traditional network channels; until television and the Internet converge, cable companies and YouTube will both continue to grow, but neither one will knock the other out of orbit.