Google to acquire On2 for $106M
Google has agreed to acquire On2 Technologies, a developer of video compression technology, for $106 million. On2, known for it's VP3, VP4, VP5 and TruMotion VP6, VP7 and VP8 codecs, counts companies such as Skype, Adobe, Sun and Sony among its customers. In 2001, On2 released its VP3 codec as open source through an agreement with the Xiph.org foundation. The VP3 codec became the basis of what is now called Ogg Theora.
In a blog posting, Google says that it is not in a position to discuss its product plans until the deal is closed. Google expects that to happen in the fourth quarter of this year after an On2 stockholder and regulatory review. The company does say though that it is "committed to innovation in video quality on the web" and that the acquisition "will help us further that goal". This innovation will most likely centre around Google's YouTube service which would benefit from better video compression technologies, especially as license fees for streaming services using the H.264 codec will apply from 2011.