Internet search leader could announce a deal to buy top online video service YouTube Inc as early as Monday, a source said.
Updated at 2 am, Tuesday
SAN FRANCISCO: Web search leader Google Inc on Monday said it agreed to acquire top video entertainment site YouTube Inc. for $1.65 billion in stock, putting a lofty new value on consumer-generated media sites.
The deal, the first to value one of the new crop of user-participation web sites at more than $1 billion, combines two of the most popular Internet brands: Google, synonymous with web search and rapid innovation, and YouTube, a Silicon Valley upstart that has spearheaded the video-sharing craze.
Earlier, the board of directors of both companies met to vote on the deal, the Wall Street Journal reported on its Web site, citing an unnamed source.
YouTube has been the target of criticism in the media industry for allowing pirated video clips to be uploaded and viewed on its service.
The programming agreements follow media reports that Google is in talks to buy the 19-month old YouTube, which lets users share home-made videos. If consummated, Google would vault to the top of the Internet video sector, ahead of Yahoo Inc and Time Warner Inc's AOL.
YouTube's explosive growth -- it now serves 100 million videos per day -- has been buoyed by the uploading and viewing of untold amounts of pirated video clips, media executives say, making any acquisition difficult.
But in one fell swoop, YouTube and Google appear to be allaying the fears of the music industry. Both companies have declined to comment on merger talks.
On Monday morning, the Universal Music Group said it will offer thousands of its music videos to the millions of users of YouTube, ending a public feud over the protection of artists' rights.
YouTube's deal with Universal was similar to an earlier deal with the Warner Music Group, in which the label will offer thousands of its videos to YouTube users as well as make songs available to be used in the site's homemade videos.
Media companies that have signed deals with YouTube have also cited a new filtering technology the company is developing that lets rights owners eliminate pirated videos found on YouTube, or have the service begin selling targeted advertising around the clip.
Within 30 minutes, other deals came pouring in: Google announced separate music video deals with Warner Music and Sony BMG.
YouTube announced another music video deal, this time with Sony BMG, and a separate short-form video deal with US television network CBS Corp.
Sony BMG is a joint venture of electronics maker Sony Corp and Bertelsmann.
Google shares rose $7.95, or nearly 2 percent, to $428.45 on Nasdaq.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}