Video sharing is not a new phenomenon, you will find tons of video sharing sites, however there is a reason why YouTube is so popular among the masses, it is used not only by individuals but also by several broadcasting and media companies to share videos online.

Google has always been innovating things with YouTube, the most recent innovation coming in the form of 3D YouTube videos.

Today Google has decided to take things to a new level by acquiring On2 Technologies a company that provides technology for video compression, this move makes sense and fits well into the scheme of making YouTube videos much more faster than they already are right now, and making video sizes much more smaller.

The deal was done for $106.5 million and was a stock for stock transaction where On2 technologies exchanged their 60 cents share for Google stocks.

Not surprisingly Google has once again decided to make use of available technologies instead of building from ground up, some of the most successful Google products were past acquisitions including Writely, Sketch Up and Picasa.

It would be good to see how Google turns this acquisition into something useful, we will hold on the horses for now and let you know more about it whenever we come to know.

Innovation in video on the web [Official Google Blog]