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Google Buys On2 Video Technology for $106.5 Million


August 07, 2009

Google Buys On2 Video Technology for $106.5 Million

By Amy Tierney
TMCnet Web Editor


Internet search giant Google, Inc. announced this week it agreed to buy a New York-based developer of video compression technology.
Google (News - Alert) said it reached a deal to acquire On2 Technologies, Inc. for $106.5 million. On2 is widely known for its ability to build video compression technologies.

"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, in a statement. "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."
On2 Technologies (News - Alert) is a company known for building video compression technologies. The acquisition raises questions regarding how the company plans to use the company’s services. According to the Boston Globe, the move will help Google bolster its YouTube site with software that compresses video clips so they are easier to download. Google bought YouTube, the largest video sharing site, for $1.65 billion in 2006.
Other news reports said that Google will likely integrate On2's Technologies into its Chrome browser to make it more powerful and a more attractive alternative to as Microsoft's (News - Alert) Internet Explorer and Mozilla's Firefox.
No matter what Google’s plans are for On2, company officials said the acquisition would further strengthen Google.
"We're thrilled that On2 is joining one of the world's most innovative companies," said Matt Frost, interim CEO of On2, said in a statement. "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 transaction, which is subject to stockholder approval, is expected to close in the fourth quarter.
On2 Technologies recently made headlines when the company unveiled the Hantro (News - Alert) 8270 1080p Encoder, an ultra, low power, high performance H264 Encoder IP core that can process up to 1920 x 1080 resolution video at 30 frames per second. The Hantro 8270 incorporates a proprietary indexed full search motion estimation algorithm to reduce clock requirement without affecting video quality, TMCnet reported.

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Amy Tierney is a Web editor for TMCnet, covering unified communications, telepresence, IP communications industry trends and mobile technologies. To read more of Amy's articles, please visit her columnist page.

Edited by Amy Tierney

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