However, although the site has mass appeal most of its offerings are free. YouTube and others are now working on ways to generate cash from their sites.

Huge potential

For example YouTube has recently signed a deal with Paris Hilton to provide a branded channel dedicated to the hotel heiress.

The channel showcases Hilton's new pop career and allows users to watch and rate her latest music videos.

In addition, the site is in talks with record labels like EMI and Warner Music to offer current and archive music videos from other artists.

Users of Grouper can also expect changes to their site following the acquisition by Sony.

Although no immediate changes are planned, Sony said that the site had potential for developing "ad-supported and premium-based services".

"Grouper gives us a strong platform for growth," said Michael Lynton, chairman and chief executive officer of SPE.

Sony already allow paid for downloads of some of its films and plans to release more. But unlike many entertainment companies, like Walt Disney or Universal, it does not own a broadcast network.

The purchase of Grouper gives it immediate access to an estimated 8 million users.

"Consumers are spending more and more time on sites like Grouper, and as one of the world's largest creators of entertainment, we want to be where the audiences are," said Mr Lynton.

Sony studios are also interested in the content of the site as a source of new ideas and talent.

"It's like a virtual global audition," said Mr Lynton.