Google Buys YouTube for $1.65 Billion

Google has agreed to purchase popular video sharing site YouTube for $1.65 billion in stock, the two companies announced after the close of the stock market Monday. The deal marks the largest acquisition for Google in the company's eight-year history.

A potential deal had been rumored since late last week, prompting surprise from a number of industry watchers who failed to see what Google would gain from the purchase. However, the search giant says it will unite YouTube with its online advertising platform.

The deal was reportedly developed in less than a week, and is a massive sum for a company with just 67 employees that was founded only 19 months ago. But YouTube's popularity on the Internet has seen unprecedented growth, even recently outpacing the popular MySpace social network site.

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"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," Google CEO Eric Schmidt said in a statement.

"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," remarked YouTube CEO and co-founder Chad Hurley.

YouTube will retain its brand name and offices in San Bruno, Calif., the companies said, and all YouTube employees will keep their jobs. The acquisition is expected to close before the end of the year.

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