It would probably cost them less than buying a video codec company, but might have bigger and far reaching effect.
Imagine a single site will all the educational material, regularly updated. The only difference from a formal education (other than social interaction) is a certification.
Crazy (stupid?) idea?
Take every topic taught in formal education -- from K-12 through undergrad and graduate school. Break it up into small 2-day to 2-week modules. Categorize each module in terms of its prerequisities and teaching style (creating a giant graph through which students can travel). Provide pre- and post-tests (or simply let students self-declare their mastery of earlier subjects). Put it all online.
Others are thinking this way, too. See David Gelernter's 'Tracks and Clusters' concept from the 2009 Edge essays:
http://edge.org/q2009/q09_9.html#gelernter
(He adds to the online component real-life 'cluster rooms', where students working on similar materials gather for additional mutual in-person instruction.)
The reason I specifically mentioned Google because, it is the only company that is crazy enough to do something like this without expecting any direct profit in return. They also have the engineering muscle and deep pocket to make it possible.
I always felt, throughout my years in school, how inefficient our education system is. Not only in USA, everywhere in the world (AFAIK).
Imagine how much effect this will have on third world countries (with the help of cheap computers like OLPC) with course material translated to local language? Ok maybe it won't be perfect and some problems needs to be solved, but it will be better than having little to no access to high quality courses of higher education?
Hell, if I had couple of millions lying around. I would give it a shot myself.
They have great collection of youtube videos - http://www.youtube.com/iit
Khanacademy has good resources for Primary and Higher Secondary level. A good online repository of aggregating all these education videos , may be playlist of courses would be brilliant.
The university of the people professes: Tuition Free Online University http://www.uopeople.org/
There are others like them out there too. If you have the skills to execute who cares about that piece of paper?
I work through these a while ago and can attest to the validity of the above statement.
Here is code that calls the above repeat() function, printing what it returns:
print repeat('Yay', False) ## Yay