Google buys codec masters On2

Share This August 5th, 2009 Antowan

Google Inc. announced on Wednesday that it will issue US$106.5 million in stock to acquire On2 Technologies Inc. as the Internet-search company looks to solidify its video operations. On2 is a maker of video codecs responsible for the efficient transmission of video content over the Internet. The company has developed codecs for the likes of Macromedia Flash back in 2004 and is responsible for a new range of codecs that offer competitive compression versus quality ratios to favored codecs like H.264/AVC also based on claims of comparative technical capabilities and licensing costs.

Recent deals include development deals with Apex Datacom, IWAPI Inc., Vividas, Digital Witness, XM Satellite Radio, PowerLinx, and Leapfrog. Perhaps more interesting to you might be the fact that On2 had a major role in the video conferencing abilities of Skype 2.0 and beyond. Its own acquisitions of some very interesting companies in the codec market has made On2 a very interesting entity for companies like Google, who in the end saw enough value in On2 for its own future video endeavors to gobble it up sooner rather than later.

On2’s revenue hasn’t been star struck in my own opinion if you consider its past dealings, but the value proposition for the technology y it has rights over is what boosted the offer of US$1106.6 million. The dealings with Macromedia have turned into deals with Adobe after the latter’s Macromedia transaction and they also sport Nokia and Infineon Technologies as clients.

Consider the fact that one of the world’s most popular video services, YouTube is owned by Google; it is understandable where Google’s interest in the codec market comes from.

Entry Filed under: Broadband, General IT, World Wide Web