If you touch a patented codec (in a country where software patents apply), you need to pay for patent license regardless whether you wrote the code yourself or not. Google must be paying for H.264 encoding already.
> Why would google want to reengineer and build closed sourced video converters?
To adapt them for their infrastructure and trade-offs. They are transcoding a lot of video. Zencoder for example modified their transcoders to encode multiple formats from a single decoded stream (I presume with ffmpeg you'd end up decoding same video multiple time during transcode into multiple formats).
I think you can use ffmpeg to decode to a buffer (memory or disk as needed), and the re-encode from that buffer into various sizes/formats. don't think you actually need a different encoder/decoder to do that. I may be horribly wrong though :)
> Why would google want to reengineer and build closed sourced video converters?
To adapt them for their infrastructure and trade-offs. They are transcoding a lot of video. Zencoder for example modified their transcoders to encode multiple formats from a single decoded stream (I presume with ffmpeg you'd end up decoding same video multiple time during transcode into multiple formats).