# On2 Shareholders Get Their Wish, Maybe: Google Adds $26.5 Million Cash To Its Buy Bid; Final Offer Finally, after a few months of feet dragging by On2 shareholders, Google (NSDQ: GOOG) has amended its acquisition offer for the Clifton Park, N.Y.-based video-compression developer: in addition to the previous stock only offer of about$106.5 million, it is adding $0.15 per share in cash consideration, which based on the 176.59 million outstanding shares, adds about$26.5 million to the deal value.

The rationale, in PR spin, from Google: “The revisions to the terms of the merger agreement serve, in part, to address the fact that, since the acquisition was first announced in August 2009, the market value of Google’s Class A Common Stock has increased significantly while the value of the acquisition has remained fixed for On2’s stockholders. By increasing the consideration offered to On2’s stockholders by an additional $0.15 per share in cash, On2’s stockholders will receive additional value for their On2 common stock that Google and On2 believe better reflects the value that On2’s stockholders would have received had the acquisition closed closer to the time of its announcement in August 2009.” In other words, On2 shareholders’ efforts may have borne fruit, though it remains to be seen if a majority will approve the deal this time. Google, for its part, says this is the final offer, take it or leave it. The stockholders meeting to vote on this offer is on Feb 17. —————————- Google and On2 Agree to Amend Merger Agreement Press Release Source: On2 Technologies, Inc. On Thursday January 7, 2010, 8:00 am CLIFTON PARK, N.Y. and MOUNTAIN VIEW, Calif., Jan. 7 /PRNewswire-FirstCall/ — On2 Technologies, Inc. (NYSE Amex: ONT) and Google Inc. (Nasdaq: GOOG) announced today that they have agreed to amend the merger agreement under which Google will acquire On2. Under the revised terms, each outstanding share of On2 common stock will receive 0.0010 of a share of Google Class A Common Stock for each share of On2 common stock, as previously announced by On2 and Google, plus an additional$0.15 per share in cash consideration.

The revisions to the terms of the merger agreement serve, in part, to address the fact that, since the acquisition was first announced in August 2009, the market value of Google’s Class A Common Stock has increased significantly while the value of the acquisition has remained fixed for On2’s stockholders. By increasing the consideration offered to On2’s stockholders by an additional \$0.15 per share in cash, On2’s stockholders will receive additional value for their On2 common stock that Google and On2 believe better reflects the value that On2’s stockholders would have received had the acquisition closed closer to the time of its announcement in August 2009.

This increase in the consideration that Google is offering to On2’s stockholders constitutes Google’s final offer.

Google will file with the SEC a supplement to the definitive proxy statement/prospectus, dated November 3, 2009, that will describe the revisions to the merger agreement, including, among other things, the increase in the consideration, and will mail the same to all holders of record of On2 common stock as of the close of business on January 15, 2010, the new record date for the further adjourned Special Meeting of On2’s stockholders.

On2’s further adjourned Special Meeting will be reconvened at the Comfort Suites in Venetian Room II at 7 Northside Drive, Clifton Park, NY 12065, at 4:00 p.m. on Wednesday, February 17, 2010. At the reconvened Special Meeting, holders of On2 common stock as of the new record will be asked to consider and vote upon the merger proposal and, if necessary, the adjournment proposal, as set forth in the proxy statement/prospectus filed by Google.

On2’s board of directors approved the amendment to the merger agreement and recommends that On2’s stockholders approve the amended merger agreement and the merger proposal.

Stockholders who have questions about the merger, need assistance in submitting their proxy or voting their shares (or changing a prior vote of their shares) should contact On2’s proxy solicitor, Innisfree M&A Incorporated, toll-free at (877) 456-3488, or internationally at +1 (412) 232-3565.

On2 (NYSE Amex: ONT) creates advanced video compression technologies that power the video in today’s leading desktop and mobile applications and devices. On2 customers include Adobe (NSDQ: ADBE), Skype, Nokia (NYSE: NOK), Infineon, Sun Microsystems, Mediatek, Sony (NYSE: SNE), Brightcove, and Move Networks. On2 Technologies is headquartered in Clifton Park, NY USA. For more information, visit www.on2.com or www.on2.cn.