Yahoo is planning to lock horns with Google in the online video space. The Internet pioneer is hosting discussions with video producers with intentions of launching a YouTube competitor later this summer according to people briefed on the matter as reported by Ad Age.

The company had hoped to unveil the service during a presentation for advertisers last month but contract issues reportedly held the project back.

Yahoo’s service, much like YouTube, will offer content creators their own channels to host videos. And again, like YouTube, Yahoo’s video player will be embeddable on other sites. In this example, that means Yahoo’s own homepage as well as on Tumblr. There’s also a network for non-Yahoo sites, we’re told.

YouTube already has a massive user base so why would Yahoo even dare to compete against a giant? Because they think they can lure some of its users away through the use of more generous revenue sharing offers and fixed ad rates that pay significantly more than YouTube currently does.

If you aren’t familiar, Google takes a 45 percent cut of ad revenue from its YouTube partners. Yahoo will offer a split that is more in favor of content creators although the exact number isn’t known just yet.

Yahoo has been interested in getting into the digital video market for quite some time. Under the tutelage of Marissa Mayer, the Internet pioneer attempted to acquire online video website Dailymotion but ultimately backed out following resistance from the French government. Shortly after, Yahoo's name was tossed around as a potential suitor for Hulu.