The world's largest online search firm announced today that it will buy the largest online video site for $1.65 billion in stock.

Mountain-View based Google Inc. confirmed rumors that it was in negotiations with YouTube, an online video sharing website that garners nearly half of all video related traffic on the internet.

The acquisition combines one of the largest and fastest growing online video entertainment communities with Google's expertise in organizing information and creating new models for advertising on the Internet, the firm stated.

The YouTube team has built an exciting and powerful media platform that complements Google's mission to organize the world's information and make it universally accessible and useful,' said Eric Schmidt, Chief Executive Officer of Google.

Our companies share similar values; we both always put our users first and are committed to innovating to improve their experience. Together, we are natural partners to offer a compelling media entertainment service to users, content owners and advertisers.'

Google YouTube