If you don't already know who they are, On2 Technologies has been developing video software for more than a decade. Past products include the codec on which the open source OGG Theora is based.
On2 specializes in web and mobile phone video solutions, like the tools they make for Adobe Flash authoring.
Obviously Google already has a significant presence in the web video world just with their ownership of YouTube. With the introduction of their Chrome OS and Chrome Browser it's an obvious time for them to want more input into streaming video delivery.
Many tech analysts are suggesting this is a move primarily intended to reduce costs assocaited with YouTube. But their Chrome browser and netbook OS may explain it even better.
If they can successfully promote one or more of their codecs as an alternative to H.264 (MPEG-4 AVC) they could benefit greatly from having On2 developers available to help with browser integration.
If, as some have suggested, they also decide to release one or more On2 codec as open source it could become very popular very quickly.
As much as Google likes open source, On2's existing business model would seem to get in the way right now. On2 currently sells their technologies for products like Adobe Flash Player and Skype.
It might be reasonably easy to release just the TrueMotion VP7 and VP8 codecs as open source and leave the more common VP6 codec proprietary for now.
Making On2's codecs open source might sound like a strange idea since it would mean not collecting royalties they would otherwise be entitled to. Of course On2 hasn't been making all that much on royalties so it's not like they'd be slaughtering a real cash cow.
And it might provide a solution for the lack of a standard format for HTML 5's <video> tag. Rigt now disputes over royalties have gotten in the way of specifying standard codecs for HTML 5. A high quality open source video codec could arguably solve all the problems with adopting OGG Vorbis or H.264.
Of course that would still require the support of Apple, Microsoft, Opera Software, and Mozilla.
Buying On2 looks like an attempt by Google to establish a web video standard, both on the service side for sites like YouTube and on the client side for Google Chrome or even the Android mobile phone OS.
Written by: Rich Fiscus @ 6 Aug 2009 2:52