Google Inc. on Monday said it has agreed to acquire video site YouTube Inc. for $1.65 billion in stock, a move that greatly expands the search engine giant's advertising reach in online video.
The acquisition would combine the largest company in online search with one of the largest sites for video sharing. The deal was announced the same day both companies unveiled separate content deals with major record companies.
In a joint teleconference, YouTube co-founder Chad Hurley said the acquisition would give the startup, founded in February 2005, the money and engineering resources needed to add services and accelerate its growth. In July, YouTube was the third most popular site for streaming or downloading video, followed by No. 1 Yahoo and social-network MySpace.com, according to ComScore Networks.
Eric Schmidt, chief executive for Google, said YouTube was the "clear winner on the social-networking side of video."
"That's what really drove us to pursue this transaction," Schmidt said.