None of the defendants had anything to do with making the video.
A fourth defendant in the case, charged only with defamation, was acquitted.
Google called the decision "astonishing" and said it would appeal.
Peter Fleischer, Google's global privacy counsel, who was convicted in absentia, said in a statement: "The judge has decided I'm primarily responsible for the actions of some teenagers who uploaded a reprehensible video to Google video."
" ... [Google now] need to rethink how they respond to requests to pull things down when people find them objectionable"
Google, which is based in Mountain View, California, has said it considers the trial a threat to internet freedom, arguing that pre-screening the thousands of hours of footage uploaded every day to sites like YouTube would be impossible.
Aaron Martin, an internet expert and lecturer from the London School of Economics, told Al Jazeera the trial posed a challenge to Google's business model.
"Their business model for years has been just to put as much information online as possible, but now they need to rethink how they respond to requests to pull things down when people find them objectionable.
"[But] there so much material out there, I can't think of a practical way by which one could identify everyone who is uploading material, or to attach a name or identifying information to everyone who uploads a comment that might be found objectionable or a video that might upset someone."
The three men convicted were David Drummond, chairman of the board of Google Italy at the time; George De Los Reyes, then a board member who has since left the firm; and Fleischer, who was responsible for privacy issues.
The charges were sought by Vivi Down, an Italian advocacy group.
Separately, Google took another blow in Europe when regulators in Brussels said they would investigate complaints filed by three web companies that contend Google is anti-competitive.
The complaints were made by British price comparison website Foundem, French legal search engine ejustice, and Microsoft's Ciao from Bing.
Google has said it will provide information to the European Commission and was confident its operations conform to European competition law.
In a blog post on Tuesday, Google indicated that the grievances revolve around how it ranks Web sites in its search results and the online advertising system that generates virtually all its revenue.