Google and On2 have announced a definitive agreement that will result in the Google acquisition of On2 for a transaction valued at approximately $106.5 million. On2′s feature product is the industry leading VP6-E and VP6-S video codecs. The VP6-E for Flash and JavaFX video and the VP6-S profile for High Definition (HD), full screen video are available in their Flix Video Encoding and Publishing software packages. The On2 Flix Engine also supports the H.264 codec for Flash, iPhone and iPod. On2 customers include Adobe, Skype, Nokia, Sun Microsystems, Sony, and Brightcove. The On2 acquisition gives Google ownership of a prolific and critical codec for the delivery of video content. On the heels of the recent HTML5 video tag debacle, Google appears to be strengthening its position for the next video codec showdown.

“Today video is an essential part of the web experience, and we believe high-quality video compression technology should be a part of the web platform,” said Sundar Pichai, Vice President, Product Management, Google. “We are committed to innovation in video quality on the web, and we believe that On2’s team and technology will help us further that goal.” Google to Acquire On2 Technologies [Business Wire].

Here is the email FAQ that all On2 license holders received:

“There are a number of details to work out as the transaction proceeds, but I wanted to take a minute to answer some immediate questions about what it means for our Flix products and customers.

Q: Who do I deal with for Flix technical and sales support?
A: You’ll still deal with On2 as you always have. We will keep you closely informed of any changes (for example, new email addresses) as they occur.

Q: Why is Google acquiring On2?
A: Google has indicated to us that they are continually looking to improve video quality and delivery on the web, and that our video technologies will allow them to do even more with their products and initiatives. They have indicated that they are interested in all parts of our video technology. With Google Video, Google Talk and YouTube, among others, they have a substantial interest in developing tools and technology that will better support more high quality video on the Internet. Google has indicated that they believe that our team and technology will help Google make higher quality video available online.

Q: What will happen to Flix?
A: Google is acquiring all of On2 and therefore all On2 products. It is too early to discuss specific product plans until the deal closes, however, all existing agreements will remain in effect under their existing terms.

Q: What, if anything, will happen to my license?
A: All agreements you have with On2 remain in effect under their existing terms. We expect that Google would honor its obligations under existing contracts.”

Read Google to Acquire On2 Technologies on businesswire.com

Read more about VP6-E and the VP6-S profile for High Definition (HD)

Visit On2 Technologies Inc.