Google Buys YouTube for $1.65 Billion

The research market firm Hitwise reported that YouTube received 46% of all visits to online video websites in September, compared with 11% for Google.

Google

(MOUNTAIN VIEW, Ca.) - The Internet's largest search engine is joining forces with the most popular site to watch video on the Web. It was confirmed today that Google has agreed to purchase YouTube Inc. for $1.65 billion in stock.

YouTube's fast growing website generates an estimated 100 million videos a day.

"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," said YouTube Chief Executive Officer and co-founder Chad Hurley in a statement.

According to Google, YouTube will continue to operate as a separate company and no employees will lose their jobs over the move. The deal is expected to be wrapped up by the end of the year.

"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 Eric Schmidt, chief executive officer of Google, in a statement.

As YouTube has attracted its major worlwide following, the financial and has been a challenge amid threats of lawsuits from music labels and TV studios for not blocking copyrighted works. The LA Times reports that the 60-person start-up is struggling to make enough money to offset its bandwidth costs.

Along with livedigital.com, Google is a direct competitor in the Internet video field with YouTube but never caught up with the San Mateo, Ca. based upstart that was founded by Hurley and Steve Chen.

The research market firm Hitwise reported that YouTube received 46% of all visits to online video websites in September, compared with 11% for Google.

Salem-News.com videos can be viewed on lividigital.com and Google Video, look for them soon on YouTube as well.