Internet search giant Google snapped up YouTube Inc today for $1.65bn.
The deal catapults Google to a leading role in the online video revolution.
The all-stock acquisition unites one of the Internet’s leading companies with one of its rapidly rising stars.
The price makes YouTube – a still-unprofitable start up – by far the most expensive purchase made by Google during its eight-year history.
Although some cynics have questioned YouTube’s staying power, Google is betting that the popular website will provide it an increasingly lucrative marketing hub as more viewers and advertisers migrate from television to the Internet.
“We are natural partners to offer a compelling media entertainment service to users, content owners and advertisers,” said Eric Schmidt, Google’s chief executive officer.
YouTube will continue to retain its brand, as well as all 67 employees, including co-founders Chad Hurley and Steve Chen.