San Francisco — Global search leader Google, has finally finalized its acquisition of video compression technology vendor On2 Technologies in a $120m deal which will expand the web giant’s online video capabilities.
The deal concluded as the On2 shareholders nodded their approval and was valued at $124.6 million, Google said in a brief statement last weekend. The figure was about $18 million more than the value stated when the companies announced the acquisition last year.
By this Google has built a very strong foundation in Online Videos. On2 specializes in the production of video codecs and compression tools, and has licensed some of its technology to Adobe and Sun Microsystems for use in video players and browser plug-ins.
On2 delivers high-quality video compression technologies for mobile video, embedded devices, Adobe Flash Player and VoIP (voice over Internet Protocol). Some of its esteemed customers include Skype, Nokia, Sony and Adobe, according to its Web site. Google said that it hoped the acquisition would help further innovation in online video quality.
Today video is an all-important component of the web experience, and we anticipate that high-quality video compression technology should be in the arsenal of the web platform, said Google vice president of product management Sundar Pichai at the time.
“We are thrilled to welcome the On2 team to Google and to continue to enhance the video experience for users on the web,” said Pichai.
“With speedy innovation in browsers and web standards, the Internet is transforming into the leading platform for development. We believe On2’s engineering talent and technology will be an incredible asset for us as we work to improve this platform,” he added.
The question is still whether Google will turn around and open source On2’s video codecs. In introducing the original pact, Mountain View made a point of saying that it believes “high-quality video compression technology should be a part of the web platform” — and that On2 is a means of reaching that end.
The major web browser makers — including Google, Apple, Mozilla, Opera, and Microsoft — have been unsuccessful on agreeing on a single common codec for the new HTML5 video tag. The HTML5 spec allows for any codec, and while some have opted for the open and license-free Ogg Theora, others are sticking to the license-encumbered H.264 for reasons of performance, hardware support, and alleged patent anxiety.
On2 Technologies’ VP3 codec is the basis for Ogg Theora. In 2001, On2 open-sourced VP3 under an irrevocable free license. But in the years since, the company has continued to improve its codecs, releasing five subsequent generations.
The $124.6 million acquisition has been pending since the acquisition was announced in August last year while shareholders mulled the deal.