The news comes as Google holds talks over a possible $1.6 billion acquisition of YouTube, the market leader in online video. Google has refused to comment on the talks but company insiders have told Times Online they feel there is a realistic chance of a deal being done.

YouTube, which shows more than 100 million videos a day and is seeking to earn revenues from its massive traffic levels, already has similar content deals to Google's in place with Sony BMG and Universal Music.

In a move that places the search engine giant in greater competition with Apple's market-leading online iTunes store, Google will also sell videos from Warner through its website for $1.99 in the US.

It has been possible to pay for downloads of Sony BMG videos since January this year, when the label became one of the initial partners of the Google Video store.

Sony and Warner will add advertising to music videos through Google’s AdWords platform. The companies will share revenues and the videos will be free to users.

Searchenginejournal.com, the industry blog, said: "Sony BMG and Warner Music will be able to monetise their music videos on Google Video by leveraging Google AdWords and their advertiser network of hundreds of thousands of advertisers."

Alex Zubillaga, Warner's head of digital strategy, said: "Our partnership with Google is rooted in the pioneering approach we’ve used to offer fans more music, while benefiting artists and protecting copyrights."

Competition in online video sharing is growing rapidly. Microsoft recently entered the market with its Soapbox site. Rumours are also circulating that Skype founders Janus Friis and Niklas Zennstrom are preparing a YouTube competitor under the codename "The Venice Project". Reports have suggested the site will focus on professionally produced content.

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