Google, the Internet"s leading search engine, announced Monday that it is buying popular online video site YouTube for $1.65 billion in stock.
YouTube, which was founded in February 2005, has quickly become the most well-known of several online video sites. More than 100 million videos, many of which are short videos created by the site"s users, are downloaded a day on the site.
According to Internet research firm Hitwise, YouTube has about a 46 percent share of the online video market.
For Google (Charts), the purchase of YouTube gives the company the ability to tap into the potentially lucrative online video and social networking markets. Some analysts have criticized Google for relying too much on advertising tied to keyword searches.
The combination of Google and YouTube could further strengthen Google"s dominance in online advertising, giving it an edge over rivals such as Yahoo!, Microsoft"s MSN and News Corp., which owns the social networking site MySpace. Some analysts said Monday that Yahoo, Microsoft and News Corp. also had probably expressed interest in buying YouTube.
In a statement, Google said that YouTube will operate as an independent unit of Google once the deal closes and will retain the YouTube brand name. The companies added that no YouTube workers will lose their jobs as a result of the acquisition and that Google will maintain its own online video business.