Google relies on videos on the Internet

Google paid 1.3 billion euros in shares for the video portal YouTube. This means that two of the most widely used Internet offerings are joining forces. The markets reacted euphorically to the merger. On Monday evening after the close of trading, Google announced that the acquisition would be completed in the fourth quarter of 2006. YouTube's headquarters and workforce will remain the same. The takeover is part of a broad-based strategy to invest in the growing market for videos on the Internet. Both companies had previously announced that they had signed contracts with the music industry for the distribution of music videos. YouTube in particular had attracted criticism due to the distribution of pirated videos. Since its foundation in February 2005, the video portal has risen to become the leading video portal on the Internet and is the most popular service of its kind with a market share of 47 percent. According to the company, 100 million clips are accessed every day and 65,000 new clips are uploaded. The Google video service currently has a market share of 11 percent. Its competitor MySpace has a market share of 22 percent.