MySpace has improved its low-key video sharing offering in what has been interpreted as a tactical response to Google $1.65bn purchase of YouTube last week.

User profiles on the social networking site now automatically display latest clips for users who have uploaded material, removing the need to embed videos with HTML code.

Meanwhile, four featured videos from across the network now comprise a new homepage feature in a key, above-the-fold area.

MySpace’s share of the online video market (22.99%) trails YouTube’s (45.46%) in second place, according to August statistics from HitWise.

While the pair inked a deal the same month in which Google pays News Corp $900m to deliver search and advertising technology, the acquisition of YouTube has potential to wrankle the Rupert Murdoch company.

Business Week reports millions of YouTube-hosted videos are already embedded on MySpace profiles, while Google is expected to seek to put its own advertising inside clips hosted by its new stablemate.

It had been speculated MySpace could retaliate by barring YouTube videos from its pages. The two parties reportedly met last week to discuss their relationship.