Three years after buying the video-sharing Web site YouTube, Google is making a much smaller acquisition of a company that helps make online video files smaller.
Google said on Wednesday it agreed to buy On2 Technologies, which sells video compression software, in a stock deal valued at about $106 million. The per-share price was 57 percent above On2’s closing stock price on Tuesday, and On2’s shares soared on the news.
“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,” Sundar Pichai, Google’s vice president for product development, said in a statement announcing the deal.
Google paid about $1.6 billion in stock for YouTube in 2006. The deal gave Google a hugely popular destination for online videos, but it has yet to produce significant revenue for the company.
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