Google Inc. has agreed to buy On2 Technologies Inc. for $106.5 million, bolstering its YouTube site with software that compresses video clips so they are easier to download.
On2 investors will get 60 cents in Google stock for each share they own, Google said yesterday. That’s 57 percent more than On2’s closing price Tuesday.
“YouTube’s bandwidth costs are high, and compression technologies help you reduce the bandwidth any video uses,’’ said Sameet Sinha, an analyst at JMP Securities Inc.
On2 might let Google incorporate video-compression software into mobile phones that use its Android software, he said.
On2 shareholders and regulators must approve the deal before it can be completed, the companies said.
Shares of On2, of Clifton Park, N.Y., have almost tripled this year. They closed at 57 cents yesterday, up 49 percent.
Google also said yesterday that it has found a buyer for a radio advertising business it’s abandoning as part of its efforts to cut costs and jettison underperforming operations.
WideOrbit Inc., a privately held company that makes software for the broadcast TV and radio industries, has agreed to buy Google’s technology for automating radio ad placement. The San Francisco-based company did not disclose financial details. It will inherit 3,600 customers and an undisclosed number of employees.
Google’s departure from the radio business, revealed in February, was the latest retreat for the online search company from its three-year-old foray into traditional media. The company discontinued a similar ad-selling business for newspapers this year after disappointing returns on the investment.
