Read Write Web reports… This is BIG news for video publishers.

According to early reports from the Associated Press and Variety, Google is set to make a major announcement tomorrow concerning YouTube integration with AdSense. Selected YouTube videos will be available to AdSense publishers and will appear wrapped in banner ads.

The AP offers auto websites selecting topical videos from YouTube about cars to run along with AdSense banner ads on their sites. If the report is correct, there’s a whole lot of potential here. Though cynics have said that there’s little hope for video outside YouTube, small video ad networks insist that there’s a growing, thriving ecosystem of niche video sites just waiting for more and better content and ads.