The same technique can be used for YouTube Live. Keep in mind, this will transmit all the desktop audio through the hangout, so whatever you are listening to, they will also hear. Now your desktop output will be heard through the hangout, along with the input from your microphone.
Choose Soundflower 2ch for the input Shown below, are the two dialogs. Then choose built in output for the output. You should first click on the gear icon to open the settings. With Soundflower you can route signals making them come out of one app and go into another. Its a classic application to route sound signals between different applications and has always been a must amongst the most experienced users in terms of audio. Depending on your google account, there will be two different user interfaces. Soundflower is a tool with which you can make the most of the audio playing on your Mac. Choose Output in the menu and choose the Multi-Output device, I called mine ‘MergedOutput’. You can rename the device by clicking on the name of it in the left menu. Tick the box in the ‘Drift Correction’ column for Built-In Output. Check the boxes at the ‘Use’ column next to Built-In Output and Soundflower 2ch. Click the + button at the bottom left of the window and select Create Multi-Output Device. Go to Audio MIDI Setup ( Finder -> Go -> Utilities. Once it is installed, you will be using it plus your Macs sound controls to manage your audio. At the time of this post, the latest version is 2.0b2. To begin, download Soundflower and install it. 
Soundflower is a virtual audio device for your Mac that is designed to allow audio to be routed to different applications. Have you ever wanted to stream audio while you were on a hangout, but were unable to because of feedback in the Hangout? Well, this is the solution if you are using a mac.
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