Google Inc. has laid the speculation to rest -- it is buying YouTube for $1.65 billion in a stock transaction announced Oct 9, 2006.
YouTube operates a wildly popular Web site showing original videos that range from amateurish to professional. It will continue to operate independently after the Google acquisition "to preserve its successful brand and passionate community," Google said. The deal is expected to close in the fourth quarter.
Although YouTube CEO and co-founder Chad Hurley had earlier insisted that YouTube wasn't for sale, that view changed because Google will allow YouTube to operate independently, he said during a conference call to explain the acquisition.
Bringing YouTube into the ever-growing Google empire will mean that users have a "better, more comprehensive experience" when they upload, watch and share videos, Google said. It will also provide more opportunities for professional content owners to get their work out to a wider audience, Google and YouTube executives said.
The two companies have similar corporate values in that they are both committed to users first and also to innovation, Google CEO Eric Schmidt said. "Together, we are natural partners to offer a compelling media entertainment service," he said. The deal is "an exciting next step" for Google, he said, adding that the company expects other deals that are related to providing video over the Internet. YouTube has "built a remarkable team" that is "a perfect example of the kind of people we like to work with."
YouTube will benefit from Google's global reach and technology know-how, Hurley said. "We're excited by this announcement and thrilled to join forces with the Google team," he said. The acquisition will boost YouTube's new video content platform, which is expected to launch in the next month, he said.