Google acquires video compression software maker On2 for $106.5 million. While the search engine company noted the importance of video online, Google declined to specify how it will use On2's assets. The best guess is that Google will support its YouTube video-sharing site with the compression codecs, joining Apple, Adobe and Microsoft in offering video technologies. Are open-source codecs in Google's cards?
Google agreed to buy
video compression software maker On2 Technologies
for $106.5 million in stock Aug. 5.
On2's Video software compresses video in more than 2 billion desktop
computers and mobile devices and worldwide for such companies as Adobe, Skype,
Nokia, Sun Microsystems, Sony and Brightcove. Such technology would be a fine
fit for Google's leading video-sharing Website YouTube, which it acquired in
2006 for $1.6 billion.
"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 of product management at
Google was mum about how exactly it plans to use the On2 assets, which On2
interim CEO Matt Frost said On2 will
continue to improve, support and sell throughout the transition.
"Although we're not in a position to discuss specific product plans
until after the deal closes, 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," wrote Jeremy Doig, engineering director for video, and
Group Product Manager Mike Jazayeri in a blog post today
Google will likely use the On2 technology, which promises "faster
encoding, easier playback, smaller files, faster download times, reduced
streaming delays and lower bandwidth costs without compromising visual
quality," to bolster YouTube. It would be Google's first buy to fortify
YouTube since the company bought
video annotation software maker Omnisio in July 2008.
On2 also makes video encoders that output Adobe Flash, Sun's JavaFX video
and H.264 video for Apple's iPhone and iPod. On2 counts Amazon, Disney and
Microsoft as encoding customers.
On2 designs embedded video codec for chip sets and devices such as mobile
phones, mobile Internet devices, set-top boxes, games decks, digital TVs and DVD
players. Nokia, Samsung and Sony use these technologies.
GigaOm's Om Malik said
the deal makes sense because most companies serious about
video own their own video technologies: Apple, Adobe and Microsoft (Silverlight
TechCrunch's Robin Wauters said
Google could open source On2's VP7 and VP8 video compression
codecs as alternatives to the H.264 codecs. This would make sense,
given Google's consistent approach in releasing technologies, such as its
Android mobile operating system and Chrome Web browser, as open-source
Google said each outstanding share of On2 common stock will be converted
into 60 cents' worth of Google class A common stock, or a 57 percent premium
over the 38 cent closing price of On2's stock from Tuesday's trading. Google
expects to close the deal, subject to regulatory review, in the fourth quarter of
Read more coverage about this deal on TechMeme here