Google to buy On2 Technologies for $106.5 million

Google (GOOG) is using its stock to buy video-compression company On2 Technologies (ONT) in a transaction valued at $106.5 million.

On2's stock will be converted to 60 cents worth of Google's common stock in a stock-for-stock transaction, the companies said in a press release today. That's a 57 percent premium over On2's most recent closing stock price. On2's shares, which closed at about 39 cents yesterday, are up more than 50 percent in today's trading.