The all-stock acquisition unites one of the Internet's marquee companies with one of its rapidly rising stars. YouTube will continue to keep its brand, as well as all 67 employees, including co-founders Chad Hurley and Steve Chen.
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. The combined companies will focus on providing a better, more comprehensive experience for users interested in uploading, watching and sharing videos, and will offer new opportunities for professional content owners to distribute their work to reach a vast new audience.
"We are natural partners to offer a compelling media entertainment service to users, content owners and advertisers," said Eric Schmidt, Google's chief executive.Google's YouTube coup may intensify pressure on Yahoo to make its own splash by buying Facebook.com, the Internet's second most popular social-networking site. Yahoo has reportedly offered as much as US$1 billion for Palo Alto-based Facebook during months of sporadic talks.