Google to acquire On2 technologies for $106 Million

Google and On2 technologies have jointly announced that they have entered into a definitive agreement under which Google will acquire On2.

On2 is well known for compressing high quality video ready for streaming on IP networks. On2's compression technologies power the video in many of today's leading desktop and mobile applications. On2 customers include Adobe, Skype, Nokia, Infineon, Sun Microsystems, Mediatek, Sony, Brightcove, and Move Networks.

"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, Vice President, Product Management, Google. "We are committed to innovation in video quality on the web, and we believe that On2's team and technology will help us further that goal."

"We're thrilled that On2 is joining one of the world's most innovative companies," said Matt Frost, interim CEO of On2. "After intensive review of On2 products, Google confirmed our long-held beliefs as to the quality of our video technologies. This transaction is a testament to the hard work of every On2 employee and the strongest possible endorsement of our products and people. On2 will continue to improve, support and sell our products throughout the transition. We believe that Google shares our ambitions and know that our products and expertise, combined with Google's globally recognized brand, ingenuity and resources, will create an incredible team."

The deal is still subject to approval by On2 Technologies' stockholders and review by relevant regulatory authorities, including the SEC, but Google expect it to close in Q4. Google refused to comment further on how it plans to implement On2's technologies and simply stated "we are committed to innovation in video quality on the web, and we believe that On2 Technologies' team and technology will help us further that goal."

It's clear that this deal will pave the way for greater compression techniques for YouTube and could mean we'll all be able to watch the latest viral videos quicker and in higher definition.