Google takes over video compression firm

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Search engine giant Google said it will pay an estimated $106.9 million in stock to buy On2 Technologies.

On2 is a company specializing in video compression technology and Google's YouTube needs technology like this.

On2 reported a loss in May and had revenues of $4 million in its last reported quarter.

The Mountain View firm's technology was described by a Google representative today as an essential element of the Web.