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Google buys YouTube

The rumors have turned out true. Google has agreed to purchase online video phenomenon YouTube for $1.65 billion in stock, the companies announced on Monday. YouTube will operate independently, and the companies will work together on building new features for independent users. Google sees advertising possibilities in the deal, and YouTube will mainly enjoy improvements in its search capabilities.

Although they recently launched a video-sharing service of their own, by completing the deal, Google will improve its service. YouTube, founded only 19 months ago, is one of the Internet`s hottest properties. The deal would also help both companies overcome copyright issues, currently the biggest question mark hovering above video-sharing online.

Around 100 million videos are available on YouTube, with 65,000 new videos added daily. The deal did not surprise many who are involved in the market and Silicon Valley, nor did the price tag attached to it. It is, however, a rare move by Google to purchase a company, a competitor at that. Few such deals involving Google have taken place in the past, with the notable exception of Picasa in 2004.