Google's announcement yesterday that it is acquiring video compression company On2 Technologies for $106.5 million may appear to be just another acquisition in a buyer's market, but there is a strong chance that it could dramatically affect video standards online. Because of the enormous share of online video viewing that Google's YouTube commands, the company can swing a bigger stick in setting online video standards than many people realize, and the company has already been frustrated by the refusal of leading browser makers to agree on a central, shared codec to mutually support.
Ars Technica suggests that the On2 acquisition will have a big impact on web video standards, and The Register comes right out and speculates that Google will quickly open source On2's video compression codecs. I lean toward the latter scenario.
