They have search and ads, and an utter inability to actually build anything else or connect with a customer base. For a company this is like having cancer. It's astounding that they can ignore the situation to such a degree.
Youtube is already an amazing force in the world, and that's with google half-assing so much of it. With enough work it could be a multi-billion dollar business and the next generation of media. Instead it'll probably take years while individuals and 3rd parties figure out ways to do what google fails to do (make content more explorable and discoverable, for one, make paid revenue models possible, for another) for them to catch on and build the functionality into youtube directly.
Meanwhile, instead of building improvements they're paying this stupid google plus strategy tax.
Google is chasing facebook when they should be chasing HBO, and amazon, and the discovery channel. It's like they live in a giant mansion with a huge lawn where a bunch of super talented people have been camping out for a while, trying to figure out how to make the next generation of video work. And everyday google gets out of bed, looks out over that scene, grunts, scratches its ass, thinks maybe they should just call the cops to get rid of the hooligans, then goes off to watch Judge Judy.