After weeks of industry speculation, search giant Google has announced a deal to acquire video sharing site YouTube for $1.65 billion, in a stock-for-stock transaction.
After the deal, which is expected to close in the fourth quarter, YouTube will continue to operate independently, says Google, in order to "preserve its successful brand and passionate community."
The Google/YouTube announcement, made after market close, follows news from earlier today that CBS had struck a strategic content and advertising partnership with YouTube. CBS will offer YouTube a mix of short-form video programming from its news, sports and entertainment divisions on a daily basis beginning this month. The two companies will share revenue from advertising sponsorships of the clips, called CBS Videos.
Google says the YouTube deal will allow it to further leverage its advertising expertise and provide a richer experience to consumers looking to consume online video.
"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," said Eric Schmidt, Chief Executive Officer of Google, in a statement. "Our companies share similar values; we both always put our users first and are committed to innovating to improve their experience. Together, we are natural partners to offer a compelling media entertainment service to users, content owners and advertisers."
"Our community has played a vital role in changing the way that people consume media, creating a new clip culture," added Chad Hurley, CEO and Co-Founder of YouTube. "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."