Google acquires YouTube for $1.65 billion

Google Inc. has agreed to acquire YouTube, the consumer media company for people to watch and share original videos through a Web experience.

The price: $1.65 billion in a stock-for-stock transaction. Following the acquisition, YouTube will operate independently to preserve its brand, according to Google.

“The acquisition combines one of the largest and fastest growing online video entertainment communities with Google’s expertise in organizing information and creating new models for advertising on the Internet,” said the company.

The combined companies will focus on providing a better, more comprehensive experience for users interested in uploading, watching and sharing videos. It will also offer new opportunities for professional content owners to distribute their work to reach a new audience.

Said Eric Schmidt, Chief Executive Officer of Google:

“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.”

”By joining forces with Google, we can benefit from its global reach and technology leadership to deliver a more comprehensive entertainment experience for our users and to create new opportunities for our partners,” said Chad Hurley, CEO and Co-Founder of YouTube. 

The number of Google shares to be issued in the transaction will be determined based on the 30-day average closing price two trading days prior to the completion of the acquisition. Both companies have approved the transaction, which is subject to customary closing conditions and is expected to close in the fourth quarter of 2006.

The fast-growing Google was founded in 1998 by Stanford Ph.D. students Larry Page and Sergey Brin.

Google today is a top web property in all major global markets. Google’s targeted advertising program provides businesses of all sizes with measurable results. Google is headquartered in Silicon Valley with offices throughout North America, Europe and Asia.

Founded in 2005, YouTube is a consumer media company for people to watch and share original videos worldwide through a Web experience. YouTube allows people to easily upload and share video clips and across the Internet through websites, blogs, and e-mail. YouTube currently delivers more than 100 million video views every day with 65,000 new videos uploaded daily.

Report by David Wilkening