Google buys video compression outfit On2

The search giant says it will take On2's technology and make it part of the Web platform.

This was originally published at ZDNet's Between the Lines.

Google on Wednesday said it will acquire On2 Technologies, a video compression company, for $106.5 million.

Under the terms of the stock swap, each share of On2 will be exchanged for 60 cents' worth of Google common stock.

Google just made a few penny stock investors very happy. On2 shares closed at 38 cents a share on Tuesday.

In a statement, Google said that it will take On2's technology and make it part of the Web platform. On2's interim CEO Matt Frost said he was thrilled with the deal, which is expected to close in the fourth quarter.

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