Google to Buy YouTube

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Google said late Monday that it agreed to acquire popular viral-video Web site YouTube (www.youtube.com) for $1.65 billion in stock.

Google, which has struggled to gain popularity with its own Google Video (video.google.com) Web site, said YouTube will operate independently to preserve “its successful brand and passionate community” after the deal closes.

The agreement marks the largest acquisition to date for Mountain View, Calif.-based Google.

Earlier Monday, YouTube announced a content and advertising agreement with CBS (www.multichannel.com/article/CA6379116.html). The company -- which has received criticism for allegedly illegally hosting copyrighted material -- agreed to let the network pull copyrighted CBS content from its site.

Google said YouTube would continue to be based in San Bruno, Calif., after the transaction is complete, and all YouTube employees will remain with the company.

The number of shares to be issued in the deal will be determined based on the 30-day average closing price two days prior to the completion of the acquisition, Google added.

“Our companies share similar values; we both always put our users first and are committed to innovating to improve their experience. Together, we are natural partners to offer a compelling media entertainment service to users, content owners and advertisers,” Google CEO Eric Schmidt said in a prepared statement.

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