James Delahunty
5 Aug 2009 11:06
Google Inc. has announced that it plans to acquire web video-compression expert On2 Technologies Inc. in an all-stock deal worth an estimated $106.5 million. On2 Technologies pioneers video compression technology geared toward providing high quality video on the web at ever-decreasing file sizes, to help address the bandwidth challenges that are brought up by the rise of online video.
Google, which owns YouTube, the largest video-sharing hub in the world, can only benefit from acquiring a well-known company such as On2. "Today video is an essential part of the Web experience, and we believe high-quality video compression technology should be a part of the Web platform," said Sundar Pichai, Google's vice president for product management in a statement.
The deal, which the search engine-giant expects to complete in the fourth quarter, will provide On2 shareholders 60 cents worth of Google class A common shares for each outstanding On2 share they hold, amounting to a 57% premium compared to the closing price on Tuesday.