DOW JONES NEWSWIRES
Google Inc. (GOOG) announced it will issue $106.5 million in
stock to acquire On2 Technologies Inc. (ONT) as the Internet-search
giant looks to buttress its video operations.
On2 makes video-compression technology, a key asset as
online-video viewership continues to surge. Google has one of the
most-visited video site - YouTube.
Google executive Sundar Pichai said, "We are committed to
innovation in video quality on the web, and we believe that On2's
team and technology will help us further that goal."
Each share of On2 will be converted into 60 cents of Google
stock. On2 closed Tuesday at 38 cents and the stock's 52-week high
is 65 cents. The deal is set to close in the fourth quarter.
On2, set to release its second-quarter results Thursday, in May
reported revenue dropped 10% to $4 million as the company's loss
narrowed. The company has been cutting costs to save cash, which as
of March 31 totaled $3.2 million, down 24% from a year earlier.
On2's clients include Adobe Systems Inc. (ADBE), Nokia Corp.
(NOK) and Infineon AG (IFNNY).
-By Kevin Kingsbury, Dow Jones Newswires; 212-416-2354;
kevin.kingsbury@dowjones.com