Google Inc. has agreed to acquire YouTube, a consumer media company designed to allow people to watch and share original videos through a web experience, for $1.65 billion in a stock-for-stock transaction. Following the acquisition, YouTube will operate independently to preserve its brand and community. The combined companies will focus on providing a more comprehensive experience for users interested in uploading, watching, and sharing videos, and will offer new opportunities for professional content owners to distribute their work to reach a new audience.
When the acquisition is complete, YouTube will retain its brand identity. YouTube will continue to be based in San Bruno, CA, and all YouTube employees will remain with the company. The number of Google shares to be issued in the transaction will be determined based on the 30-day average closing price two trading days prior to the completion of the acquisition. Both companies have approved the transaction, which is subject to customary closing conditions and is expected to close in the fourth quarter of 2006.