Google Closes YouTube Deal
By Todd Spangler -- Multichannel News, 11/14/2006 12:23:00 PM
Google announced Tuesday that it closed the acquisition of video-sharing site YouTube, five weeks after announcing the deal.
In a statement, Google said it issued 3,217,560 shares to acquire YouTube, and it also paid restricted stock units, options and a warrant that can be converted into 442,210 shares of Google's common stock.
Google announced that it planned to acquire YouTube Oct. 9 for about $1.65 billion. On Tuesday, Google said it calculated the number of shares of stock to issue in conjunction with the acquisition by dividing $1.65 billion -- minus $15 million funded to YouTube by Google between signing and closing the deal -- by the average closing price for the 30 trading days ending Nov. 9.
Google also said 12.5% of the equity in the transaction will be "subject to escrow for one year to secure certain indemnification obligations."
Google reportedly has been in talks with major media companies -- including CBS, Time Warner, NBC Universal, Viacom and News Corp. -- about negotiating licensing rights for YouTube, which allows any Internet user to post video clips onto its service.
"We are excited to have closed the acquisition in order to begin collaborating to offer the best in quality and depth of content, user experience and new business opportunities for our partners," Google CEO Eric Schmidt said in a prepared statement.
"YouTube and Google will together provide innovative and exciting services for our users that will add a new dimension to online media entertainment,” he added. “We look forward to working with content creators and owners large and small to harness the power of the Internet to promote, distribute and monetize their content."
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