Google buys video compressor On2 Technologies

"We're thrilled that On2 is joining one of the world's most innovative companies," said Matt Frost, interim CEO of On2. "After intensive review of On2 products, Google confirmed our long-held beliefs as to the quality of our video technologies... We believe that Google shares our ambitions and know that our products and expertise, combined with Google's globally recognized brand, ingenuity and resources, will create an incredible team."

So, why is Google buying On2 Technologies? There are two possible scenarios. First, acquiring On2 Technologies would make sense if Google wants to enhance the qualities of videos on YouTube. This week Google announced YouTube would be adding a 'adsense like' revenue sharing model and they also promoted the local video-segment on YouTube which had been live several weeks now, but didn't catch on yet. These could all be signs Google is making steps to get YouTube the financial success it has been haunting for years.

With YouTube still not being very profitable there could however also be another reason for this buy. In the press release Sundar Pichai, Vice President of Product Management at Google, said: "We believe high-quality video compression technology should be a part of the web platform, 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." This could indicate that Google might be offering compression technology as a service.

But for now we believe it probably has something to do with YouTube, but maybe there is more...