Google has acquired YouTube, the video sharing website, for $1.65 billion (£884 million) in a stock-for-stock transaction.
When the acquisition has been completed, YouTube will retain its brand identity and strengthen and complement Google’s own video business.
In a statement, Google said that the number of Google shares to be issued in the transaction will be determined based on the 30-day average closing price two trading days prior to the completion of the acquisition.
Both companies have approved the transaction, which is subject to customary closing conditions and is expected to close in the fourth quarter of 2006.
Last month, ComScore World Metrix released research which showed that YouTube was the fourth most visited user-generated-content website in the UK (see User-Generated-Content Websites Show Large Traffic Growth).
Eric Schmidt, chief executive officer of Google: “The YouTube team has built an exciting and powerful media platform that complements Google’s mission to organize the world’s information and make it universally accessible and useful.
“Our companies share similar values; we both always put our users first and are committed to innovating to improve their experience. Together, we are natural partners to offer a compelling media entertainment service to users, content owners and advertisers.”
Chad Hurley, CEO and co-founder of YouTube, said: “Our community has played a vital role in changing the way that people consume media, creating a new clip culture. By joining forces with Google, we can benefit from its global reach and technology leadership to deliver a more comprehensive entertainment experience for our users and to create new opportunities for our partners.
“I’m confident that with this partnership we’ll have the flexibility and resources needed to pursue our goal of building the next-generation platform for serving media worldwide.”
Google’s second quarter results showed a a 77% increase over Q2 2005, with revenues of $2.46 billion for the period ended June 30 (see Google Q2 Results Show Continued Growth).
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