Google buys video technology firm

Google is the world's leading internet search engine

Google has announced a deal to buy On2 Technologies, which provides technology that should help improve video quality on the internet search engine.

The deal for $106.5m (£62.7) should be concluded later this year, subject to On2 shareholder approval.

On2's technology helps shrink video files, allowing high definition images to be delivered over the internet.

"We believe high quality video should be part of the web platform," said Sundar Pichai at Google.

"We are committed to innovation in video quality on the web, and we believe that On2's team and technology will help us further that goal," he added.

Current On2 customers include Adobe, Skype, Nokia and Sony.

Google is the undisputed leader in internet search engines.

Last week, technology giant Microsoft and website Yahoo announced a tie-up designed to break Google's stranglehold.