Google is covering its assets in the YouTube buyout by setting aside nearly a quarter of a billion dollars as a cushion to cover losses or legal bills resulting from copyright violations at YouTube.

Google disclosed the escrow account in an announcement noting the completion of its YouTube acquisition. Without elaborating, Google said it is withholding 12.5 percent of the stock owed to YouTube for one year “to secure certain indemnification obligations.”

The percentage of stock being held in escrow translates into about 457,000 Google shares, worth about $224 million after the company’s stock price rose $8.27 Tuesday to close at $489.30 on the Nasdaq Stock Market.

YouTube recently announced that it was purging the site of over 30,000 videos, including hundreds of clips from Comedy Central, including clips from “The Daily Show With Jon Stewart,” “The Colbert Report” and “South Park.”

Here’s Stephen Colbert’s take on the controversy:

The Electronic Frontier Foundation (EFF) is fighting a controversial self-help group’s campaign to silence Internet critics.San Francisco-based Landmark Education, known for its Landmark Forum motivational workshops, is trying to suppress an investigative television news piece critical of its methods. Citing alleged copyright violation, Landmark subpoenaed three websites hosting the video — the Internet Archive, Google Video, and YouTube — seeking the identities of the anonymous uploaders.

The Digital Millennium Copyright Act (DMCA) allows a content owner to issue a subpoena for the identity of an alleged infringer without first filing an actual lawsuit.

“This is a classic example of using a bogus copyright claim to squelch free speech,” said EFF Staff Attorney Corynne McSherry. “To the extent that the documentary uses any Landmark material, that use is clearly non-infringing. Landmark is simply trying to use the streamlined DMCA subpoena process to obtain the identities of its critics.”

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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.

Apple’s recent addition of Dr. Eric Schmidt, chief executive officer of Google, to their board of directors has led to speculation about whether this will lead to closer collaboration between Apple and Google.

According to Newsweek’s Steven Levy, it will. He suggests that Apple is likely to deliver Google video as an option within its upcoming iTV wireless video peripheral.

“Is it possible that when iTV ships next year, you may also be able to choose a menu item called Google Video, and then zip through the best of the thousands of user-submitted videos on the search giant’s service?” asks Levy. “Google’s consumer product chief, Marissa Mayer, tells me that indeed, the two companies are engaged in talks.”

The idea of the two companies together to deliver Google content via iTV makes sense. Earlier in the year, Google demonstrated technology that allowed AdSense-like dynamic video ad insertion into television content.

Since most people would prefer to watch Internet video on their television, a Google-Apple mashup could give Apple content to move its iTV box, and could put Google in the position of competing with local broadcasters and cable companies.