Google paid a "knockout" price that traditional media companies could not have matched when it bought video entertainment site YouTube for $1.65 billion, the chairman and CEO of Time Warner said.

"The AOL guys would've loved to have got YouTube. We looked but decided AOL has not only better technology but it's also in-house," said Dick Parsons, CEO of Time Warner, which owns AOL.

"Here are lots of reasons why we did not go to the Google level (on price). YouTube has no earnings. How do you convince the market you can make money? Google can do that better than anyone and I didn't have Google dollars," he told reporters at a media conference.

Web search leader Google said on Monday it had agreed to acquire YouTube Inc. for $1.65 billion in stock, the highest price yet paid for a consumer-generated media site. "It's a stunning price, a stunning story. You have to tip your hat to the founders. It's a knockout price," Parsons said on the sidelines of the MIPCOM conference in Cannes.

"Some of these sites are working, most are not. Whether it will be a value-adding asset remains to be seen. But note the acquirer. For us and traditional media companies this would be a tough, tough price. But for Google it's in their sweet spot." Parsons said Google wanted to acquire anything that generates traffic and said he saw the firm as a partner.

"Google is misunderstood a lot, as seeming to want to dominate the Internet. They see themselves as an enabler, not a portal. They acquire as much web traffic as they can and monetize it based on their technology," he said.

"AOL is more the Yahoo! model. It's the second biggest platform in the U.S. We use Google to help monetize the traffic. We think we are in congruent, not overlapping, space. We can be good partners for a long time to come."