Google purchases Youtube

Google had acquired YouTube for $1.65 billion in stock compensation. YouTube will continue to operate independently. Google Video will continue to operate separately.

The acquisition combines the largest and fastest-growing video-sharing community online with the largest search engine. YouTube, which was founded in December 2005, serves over 100 million videos per day via its progressive downloading technology. The site has captured 47.07 percent of the online video market, compared to Google's 11.09 percent. Google, meanwhile, holds about 50 percent of search market share, outstripping its closest rival, Yahoo, by about 25 percent.

The acquisition of YouTube gives Google a greater ability to capture more of the online video and social networking advertising market. Buying YouTube may also give Google a competitive edge against News Corp., which owns social networking site MySpace. MySpace currently owns about 20 percent of the video-sharing market, according to Hitwise.

Source: Google