Google Nearer to Completing On2 Acquisition

Google moved one step closer to completing its acquisition of On2 Technologies today.

Video-compression vendor On2 announced that it and Google have been granted early termination by the Federal Trade Commission and the Antitrust Division of the Department of Justice of the mandatory waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

With that milestone achieved, the two companies have satisfied a key condition for completion of the proposed merger. The deal also is subject to the adoption of the merger agreement by On2 shareholders at a special meeting.

The only serious threat to the consummation of the acquisition is a lawsuit filed by dissident On2 shareholders unhappy with the price the company’s officers extracted from Google.

Although the shareholders behind the lawsuit contend that On2’s directors violated their fiduciary duty in not seeking another prospective buyer and in failing to negotiate a higher price from Google, their case might be difficult to prove. Google could probably make it go away by agreeing to raise its offer by a few cents per share, but there’s been no indication that’s about to happen.

3 responses to “Google Nearer to Completing On2 Acquisition


    Better Video Compression is Key to Stemming the “Exaflood”
    by John Luther on August 14, 2008

    A recent white paper from Cisco has everybody talking again about the role of video in the coming IP data “exaflood.”

    In the paper, Cisco predicts that worldwide IP traffic will surpass half a zettabyte (522 exabytes to be exact) by 2012. Previous reports on the same theme have been published by The Discovery Institute and IDC.

    Cisco also estimates that, “The sum of all forms of video (TV, VoD, Internet, and P2P) will account for close to 90 percent of consumer traffic by 2012. Internet video alone will account for nearly 50 percent of all consumer Internet traffic in 2012.”

    Think about that: 470 of the 522 exabytes of data traversing the tubes in 2012 will be video.

    Whether or not the Internet can handle this volume of data is still under debate. But what if even marginally better video compression could decrease that figure by, say, 20%?

    That would translate to a savings of over 94 exabytes per year. That’s 100,931,731,456 gigabytes.

    For argument’s sake, let’s assume that all bandwidth in 2012 will be sold at one very low price: $0.05 per gigabyte.

    Our theoretical 20% reduction in bandwidth would mean a savings of $5,046,586,572 per year.

    To anybody except the U.S. government, that’s a lot of money. And of course the likelihood of all bandwidth, everywhere, costing $0.05/GB is slim.

    Consider also that NHK Japan has been hard at work since 2003 developing Super Hi-Vision (UHDV), a video format that uses 16 times more data than today’s 1080p HD. Their goal is to begin broadcasting UHDV in 2015.

    Constant innovation in compression will be essential to manage the explosion in IP video. At On2 Technologies, our proprietary technology empowers us to develop codecs that have consistently stayed ahead of the standard formats. For example, our next format, On2 VP8, will offer better quality than H.264 and VC-1 using as much as 50% less data.

    So in On2’s OWN words they could SAVE over $5 Billion with a BBBBB in one year. You think that is worth 100 million with a M. Do you think a company that can do that “On2’s own words” is worth only $0.60 cents a share ? Even Google can see that there is value in On2 the only problem is they are trying to steal the shares from an incompetent BOD and a lazyCEO who are being bought out by Google!!!!!

  2. You may know loads about tech but you know nothing about this issue. Google will not get On2 at any price. Nor will anyone else until those responsible for the 2+years of illegal share-price manipulation and counterfeit short selling in ONT are revealed, prosecuted, and civil-sued to oblivion. Just because the previous politically-agendaed pissants running the SEC chose to facilitate this illegal abuse and ignored countless complaints and blatant evidence doesn’t mean those responsible have gotten away with it. You’ll have an opportunity to do a revision of your blog about the early termination soon enough. In the mean time, you really ought to do a bit more DD on your subject–for instance, there are more than one law suits involved here and that’s only the beginning. Good Luck with that research. Don’t be so all-fired ready to believe everything you read coming from a few schmucks with vested interests counter to the shareholders to whom they owe fiduciary accountability.

    • I would be pleased to present your side of the story. I’ll look into it further myself, of course, but if you have any corroborating evidence you’d like to furnish, please send it along.

      Best Regards, Brad

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