Google To Buy Video-Compression Firm On2 For $106.5M8/05/2009 12:04 PM Eastern
Google To Buy Video-Compression Firm On2 For $106.5M
Internet Giant Builds on Web-Video Technology Portfolio
Google plans to acquire video-compression technology vendor On2 Technologies for about $106.5 million in stock, as the Internet giant looks to build on its Web video businesses.
On2's customers include Adobe Systems, Brightcove, Move Networks, Nokia, Infineon, Sun Microsystems, Mediatek and Sony.
"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," Google vice president of product management Sundar Pichai said in announcing the deal. "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."
Publicly held On2 reported a net loss of $51.2 million on $16.3 million in revenue for 2008. The Clifton Park, N.Y.-based company, founded in 1992, last reported having 106 employees.
"We're thrilled that On2 is joining one of the world's most innovative companies," Matt Frost, On2's interim CEO, said in a statement. "After intensive review of On2 products, Google confirmed our long-held beliefs as to the quality of our video technologies... On2 will continue to improve, support and sell our products throughout the transition."
Google's acquisition of On2 is expected to close in the fourth quarter of 2009, subject to On2 stockholder approval, regulatory clearances and other closing conditions.
Wilson Sonsini Goodrich & Rosati and Potter Anderson & Corroon served as legal counsel to Google, and Credit Suisse provided M&A advisory services to Google. Covington Associates LLC served as financial advisor to On2 and its board of directors and Duff & Phelps LLC served as an independent financial advisor to On2's board of directors. Hogan & Hartson LLP and Richards, Layton & Finger served as legal counsel to On2.