Unsubstantiated rumor: The Wall Street Journal is reporting that Google is in talks to buy popular video-sharing site YouTube for roughly $1.6 billion. According to their source, “The discussions are still at a sensitive stage and could well break off.”

Neither Google or YouTube would substantiate the rumor.

While YouTube has its share of legal issues to deal with, Google has struggled to generate interest in its own video offering, and needs viewers to be able to expand its video ad insertion services.

YouTube commanded 46% of visits to U.S. online video sites in August, according to market research firm Hitwise, nearly five times the traffic generated by Google Video.