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Google Buys On2 For Possible HD Video

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Google Buys On2 For Possible HD Video

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On2 Technologies and Google jointly announced today that they have entered into a definitive agreement under which Google will acquire On2, a developer of video compression technology. Under the terms of the agreement, each outstanding share of On2 common stock will be converted into $0.60 worth of Google class A common stock in a stock-for-stock transaction. The transaction is valued at approximately $106.5 million. 

The number of shares of Google class A common stock to be received by On2 stockholders will be determined by dividing $0.60 per share by the volume weighted average trading price of a share of Google class A common stock based on the sales price of every share of Google class A common stock traded during the twenty trading-day period ending on and including the second trading day prior to the date of the meeting of On2's stockholders to consider and vote on the merger agreement.

"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," Sundar Pichai, Vice President, Product Management, Google.

"We're thrilled that On2 is joining one of the world's most innovative companies," Matt Frost, interim CEO of On2.

On2 is a company that mainly focuses on video compression.  It is rumored that Google will be using the compression/encoding to offer better HD video.  Very little details from Google have been given and I attempted to ask a few questions to Andrews Pederson (Google’s media contact for this news) and was told:

Apologies for the delay.  We're looking forward to closing the deal and moving forward with the On2 Technologies team to continue to improve high quality online video. Unfortunately I can't provide more information about our plans right now.

We will be following this story as it develops and more information emerges.

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