Web giant Google has snapped up video compression firm On2 Technologies for a total of $106.5m in a stock for stock transaction.

The acquisition will add yet another string to Google’s bow in the mobile space, as On2 specialises in technology used for shifting large video files across narrowband networks, and already has a number of customers in the mobile arena as well as the fixed line market.

On2 customers include Adobe, Skype, Nokia, Sun Microsystems and Sony.

“Today video is an essential part of the web experience, and we believe high-quality video compression technology should be a part of the web platform,” said Sundar Pichai, vice president, product management, Google.

The firm develops codecs which compress video files at one end and then decompress them on the end users’ device, to decrease bandwidth usage while keeping quality up. It’s known that Adobe uses some of the technology in its Flash platform, which Google’s YouTube uses to stream video, so it might be that Google is looking to further optimise the popular video sharing site’s platform.

But Google is also making headway into all sorts of areas with its other projects – there is the Chrome operating system for PCs and portable internet devices, as well as the Android mobile device platform, which now has designs on media centre type devices.