Google To Acquire Video Compression Developer On2 For $106.5 Million

A relatively small acquisition this morning that could have a big impact on video quality and delivery for Google (NSDQ: GOOG), which is picking up On2 Technologies (NYSE: ONT) in a stock deal valued at $106.5 million. That price doesn’t even double the $58.4 million On2 paid for Finnish mobile video tech firm Hantro in 2007.

The Clifton Park, N.Y.-based video compression developer produces video compression solutions for Adobe (NSDQ: ADBE) Flash Player, Web2.0, VoIP, mobile video and embedded devices. Clients include Adobe, Nokia (NYSE: NOK), Skype, Move Networks and Brightcove. The deal is subject to On2 shareholder and regulatory approval is scheduled to close in Q4. On2 Interim CEO Matt Frost said the company will continue to develop and sell products during the transition.

Google exec Sundar Pichai was vague in the announcement, saying that “high-quality video compression technology should be a part of the web platform” and On2 will help further goal of innovation in video quality on the web. I’d be surprised if the folks who vetted the statement meant the emphasis on the “web” to sound like he was excluding mobile.