News Corporation, the parent company of The Times, has teamed up with NBC Universal to launch a video-sharing website that will offer access to full-length television shows such as 24 and The Simpsons for free.

The site, which marks a direct challenge to the dominance of the online video world by YouTube, will feature films, television shows and clips entirely funded by advertising and is scheduled to launch in America in the summer.

Analysts said that the move demonstrated just how seriously media companies were taking YouTube, which was recently acquired by Google after little more than a year in operation and which is attracting viewers by the millions as they watch clips on the web for free rather than on the television networks.

The new venture will target web users not just through a designated site but also through a video player embedded in some of the biggest media internet sites such as those run by AOL, Microsoft, MySpace and Yahoo!

It will instantly give News Corporation and NBC access to a broad audience, making it a serious competitor to Google, which presently dominates the online video market.

The joint venture has earmarked content from popular television shows such as Saturday Night Live on NBC and The Simpsons from News Corp’s Fox network, as well as films from 20th Century Fox.

“This is a game changer for internet video,” said Peter Chermin, chief operating officer at News Corp. “We’ll have access to just about the entire US internet audience at launch.”

The service is initially being targeted at US audiences. Licensing agreements with broadcasters bind the media firms' hands outside America and it is unclear when the service might be more widely available.

The internet video market is key to the future of media and will be vast enough to accommodate competition, analysts said. But one area where YouTube is clearly ahead is in the uploading of homemade videos, a function that has made the site extremely popular with the younger audience.

Richard Greenfield, of Pali Capital, the US broker, said: “It’s still not clear how user-generated content is going to fit in and it’s still not clear that all of these companies won’t do a deal with Google over time.”

Investors shrugged off the news that Google’s video-sharing site would face competition. Google’s shares gained 1.2 per cent yesterday to $462.04 on the Nasdaq stock market. James McQuivey, an analyst with Forrester Research, added: “It’s not actually going to take away from YouTube because it’s as much about the social experience as the video. So YouTube is going to be fine.”

Mr Chernin, who denied that the new site is viewed as a “YouTube killer”, said they had even talked with Eric Schmidt, Google’s chief executive, about the venture.

Mr Chernin said: “We are, in fact, willing to sit down and talk to anybody who wants to distribute this provided they meet our economic terms and obviously meet our copyright protection terms. We have had a conversation with Eric Schmidt this morning and they are considering this.”

In a statement, YouTube said: “We value our relationships with NBC and Fox as they continue to upload content to promote their signature programming.”

NBC and News Corp are thought to have sought to woo additional media companies into their partnership, including Viacom and CBS.

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