Google Buys Video Compression Company, On2

Google has announced that it will purchase video compression company On2 for a cool $106 million.

Announced early today and expected to close later this year, the deal will see Google acquire On2, a company responsible for developing advanced video compression technologies, and whose customers include Adobe, Skype, Nokia, Infineon, Sun Microsystems, Mediatek, Sony, Brightcove, and Move Networks.

Neither company has expanded on the details of the deal. Specifically, no one is saying what Google plans to do with the technology but word is we'll find out more once the deal is all stitched up.

Outside of the official press release, Google's Jeremy Doig and Mike Jazayeri said in a blog post that the deal is still subject to approval by On2's stockholders as well as regulatory authorities, including the SEC, but the deal is expected to close in Q4.  Doig and Jazayeri went on to say that while they couldn't discuss future plans for the technology, Google recognizes the importance of video on the web and is committed to innovation when it comes to the quality of said video. Naturally, this means most folks are thinking it all has something to do with YouTube.

Check out the full release here or the blog post here.