Yesterday evening, Google announced that it has agreed to acquire YouTube for US$1.65 billion in a stock-for-stock transaction.
Once the acquisition is complete, YouTube will continue to operate independently in order to "preserve its successful brand and passionate community"
Eric Schmidt, CEO of Google, said that "the YouTube team has built an exciting and powerful media platform that complements Google's mission to organize the world's information and make it universally accessible and useful."
"Our community has played a vital role in changing the way that people consume media, creating a new clip culture. 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.
According to Hit Wise
, YouTube owns almost 43% of the online video market, while Google owns a mere 6.5% of the market. Once the aquisition is complete, the two will own almost half of the video market, with its closest competitor being MySpace videos. Yahoo! and MSN's online video schemes make up another 19% of online video searches with 9.6% and 9.2% shares respectively, while the remaining 7% of the market is shared between AOL, iFilm, Grouper Dailymotion and vSocial.
This can only mean good things for online video, in our opinion, as YouTube will be allowed to expand to its full potential. Maybe we'll see the first High-Definition video search
service sooner than we think? Share your thoughts in the forums