More on Google’s latest acquisition
On2's technologies have long been a part of the web video infrastructure, and analysts consider its newest compression technologies among the best. The company's client list includes Skype, Sony and Sun Microsystems.
"But it wasn't after them for the revenue opportunity," said Peter Bell, a partner with Highland Capital Partners, which invests in video technology companies. "It was about the core technology." On2 lost $51m last year.
Google is also expected to make On2's technology open source, releasing it to the public and essentially making it free.
"Because we spend a lot of time working to make the overall web experience better for users, we think that video-compression technology should be a part of the web platform," Google said in a blog post discussing the acquisition.