Google Grabs YouTube

Updated from 4:25 p.m. EDT

Finishing off one of the tech sector's worst-kept secrets, Google(GOOG Quote) announced an agreement to acquire online media phenom YouTube for $1.65 billion in a stock-for-stock transaction.

The companies announced after the bell Monday that the acquisition would combine one of the largest and fastest-growing online-video entertainment communities with Google's expertise in organizing information and creating new models for advertising on the Internet.

"The YouTube team has built an exciting and powerful media platform that complements Google's mission to organize the world's information and make it universally accessible and useful," said Eric Schmidt, Google's CEO. "Our companies share similar values; we both always put our users first and are committed to innovating to improve their experience. Together, we are natural partners to offer a compelling media entertainment service to users, content owners and advertisers." ...