Like everyone else, I heard the rumors, and I was skeptical. Acquisition rumors usually turn out to be exactly that ... just rumors with talks falling through at the last minute or casual talks between companies spawning rumors of impending acquisitions; however, in this case, the rumors were accurate.
From the Google Press Release:
Google Inc. (NASDAQ: GOOG) announced today that it has agreed to acquire YouTube, the consumer media company for people to watch and share original videos through a Web experience, for $1.65 billion in a stock-for-stock transaction. Following the acquisition, YouTube will operate independently to preserve its successful brand and passionate community.
On the one hand, this is a risky move for Google. The copyright issues within YouTube content could escalate now that companies could sue with the hope of making money by tapping into the deeper pockets of Google. On the other hand, Google has never been afraid of a few copyright skirmishes (the book searches and Google news come to mind as a couple of examples), and Google can usually find a creative way to make even very difficult situations work for everyone involved. I will be curious to see what happens.