Google buys YouTube for $1.65bn

Google has agreed to acquire video-sharing site YouTube for $1.65bn in stock.

YouTube will continue to operate independently, and will keep its own headquarters and employees.

Rumours surfaced last week that an acquisition was in the works. Industry analysts speculated that such a deal could be mutually beneficial, allowing YouTube to tap into Google's vast economic and technological resources while giving Google access to YouTube's millions of viewers.

Those sentiments were echoed in the words of the two companies' chief executives.

"The YouTube team has built an exciting and powerful media platform, which complements Google's mission to organise the world's information and make it universally accessible and useful," said Google chief executive Eric Schmidt .

YouTube chief executive Chad Hurley added that joining forces with Google will allow the firm to benefit from the search giant's global reach and technology, in addition to creating new opportunities for partners.

Google expects the acquisition to be finalised by the end of 2006.