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Google Acquires YouTube in $1.65 Billion Deal

"This is the next step in the evolution of the internet," company heads tell reporters.

Google Inc. has announced it agreed to acquire the video-sharing site YouTube for $1.65 billion in a stock-for-stock transaction. YouTube will continue to operate independently under the transaction, but will utilize Google’s organizational tools and advertising models. “When we looked at the marketplace, there was a clear winner in networking and social networking side of video,” Eric Schmidt, CEO of Google told reporters Monday afternoon. “People were using [YouTube] in ways we were very impressed with.”

YouTube reps said in the past that the company was not for sale, YouTube co-founder and CEO Chad Hurley explained the change of heart. “Those comments were made because wanted to be independent and continue to build great products for our users,” he told reporters. “[In our partnership with Google], we’ll be able to be independent but can sharpen our focus on a new media platform.”

This morning, YouTube announced distribution deals with Sony/BMG and Universal, as well as the CBS television network (read more).

Talk: Do you think this partnership will change YouTube for the better? COMMENT

On the Web:
youtube.com
google.com

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