Google to Buy YouTube for $1.65B

Google will acquire YouTube for $1.65 billion, marrying the dominant force in Internet search with the first and most powerful brand in networked Web video sharing, the companies announced. The deal is expected to close in Q4.

The agreement represents a big step into multimedia content and tools for Google. The company has long stated its enthusiasm for video, but has so far struggled to build a large audience around its own platform. With a value pegged at nearly three times the price News Corp. paid for MySpace only 15 months ago, the deal is also testament to the rise of social networking technologies.

“The YouTube team has built an exciting and powerful media platform that complements Google’s mission to organize the world’s information and make it universally accessible and useful,” said Google CEO Eric Schmidt in a statement. “Our companies share similar values; we both always put our users first and are committed to innovating to improve their experience. Together, we are natural partners to offer a compelling media entertainment service to users, content owners and advertisers.”

YouTube CEO Chad Hurley: “By joining forces with Google, we can benefit from its global reach and technology leadership to deliver a more comprehensive entertainment experience for our users and to create new opportunities for our partners. I’m confident that with this partnership we’ll have the flexibility and resources needed to pursue our goal of building the next-generation platform for serving media worldwide.”

YouTube will retain its brand identity and keep its offices in San Bruno, Calif.