Google can leverage its hefty stock price to buy another mega content site, but for companies like Microsoft (MSFT), it will be hard to justify the price tag of $1.6 billion.

Web-search giant Google is in talks to acquire YouTube for roughly $1.6 billion, a person familiar with the matter says. An acquisition of the closely held company would catapult Google to the lead spot in online video at a moment when consumers are rapidly increasing the amount of time they spend viewing video clips online, and Internet video advertising is booming.

The discussions between Google and YouTube are still at a sensitive stage and could break off, says the person familiar with the matter. Other technology, media and entertainment companies have expressed interest in taking stakes in YouTube this year, according to people familiar with the matter. Google rival Yahoo Inc. earlier this week expressed interest in holding acquisition talks with the video start-up, these people say. YouTube also turned down a lower proposed value from Google earlier this week, before commencing discussions about the possible $1.6 billion deal.

A YouTube spokeswoman and a Google spokesman said they don't comment on "rumors and speculation." Rumors of such talks were reported on the TechCrunch blog.