Google Buys On2

Google today announced they are buying On2 Technologies. This is one of their more significant purchases despite the relatively low price tag of $106.5 million since it’s video technology and Google is the largest video source on the web right now.

On2 is really an unknown to most people but their product has an amazing reach thanks to Adobe Flash. VP6 notably was included in Flash 8 and really brought about the age of Flash video (think YouTube). On2 also has VP7 which is considered a H.264 competitor. VP3 was released as open source and lives on as OGG Theora.

Of course by buying On2 Google will not need to pay any licensing for it’s VP7 technology, they can then bundle it into Chrome, Android and Google Chrome OS (finally giving Linux decent web video support). They could also open source it similar to these platforms in hopes that it will gain ubiquity.

This does however leave me wondering if this pending On2 deal had any bearing on the decision to leave HTML 5 <video/> codec ambiguous. It’s noteworthy since Google is very involved in the HTML 5 efforts. As I mentioned last month licensing is really key. If VP7 were open sourced and it’s licensing were compatible to meet Apple and Mozilla’s needs (which could lead to inclusion in Safari and Firefox respectively), OGG Theora is potentially dead overnight. Given Google’s strategy so far of making technology open source in efforts to encourage adoption, I wouldn’t rule this out, though it would likely take a while to evaluate everything and make sure they legally have that option. Timeline could also come into play here. The web isn’t necessarily going to wait for Google. These reviews can potentially take a long time. No guarantee others will incorporate it either, though it’s a pretty good deal should licensing work.

It’s also interesting that now Microsoft has Windows Media Player, Apple has QuickTime, and Google has On2’s codec bundle. It’s not exactly a “player”, but considering it’s usage it’s just as important.

It’s going to be very interesting to see how this plays out. One thing that seems relatively certain is that Google just made web video more interesting.

21 thoughts on “Google Buys On2

  1. It’s interesting indeed, but really I don’t see it having much impact on the HTML5 video codec debate. I mean, MS & co can apply the same BS submarine patent argument to VP7 (open sourced or not) that they apply to Theora.

  2. More likely they’ll use VP8, the more advanced video codec over old VP7. Open source VP8 to Xiph like VP3/Theora, improve it ala Thusnelda style and push it as the HTML5 codec of choice. Even Apple will have to adopt it or be left out cold.

    http://www.on2.com/index.php?599

  3. I think it’s clear that Google will open this technology in some form, but they’ve got plenty of options as to how to do it.

    For example, VP6 is only a video codec, in Flash and JavaFX it’s paired with MP3 audio and contained in the FLV container. It would seem sensible (but not inevitable) for Google to bundle their new open codec with Vorbis inside Ogg to take advantage of both the quality of Vorbis, and it’s royalty-free status in addition to the existing tool sets.

    It seems at least possible that they could make their new codec backwards compatible with existing Theora video, particularly if they follow the above course, but it doesn’t seem like a deal breaker for them or for Theora advocates (who generally are actually open video advocates).

    I’m personally most interested in the idea that they turn round to MPEG-LA members, several of whom have campaigned publicly (and unsuccessfully) for royalty-free subsets, and generally argued amongst themselves, and propose that anyone who wants an entirely royalty free standard can contribute their patents towards building on the VP codec lineage. I don’t know if that’s even possible (perhaps they’ve signed some kind of exclusive deal that prevents re-use of their IP elsewhere) but that would be a real gamechanger going forward.

  4. Olly: Yes, Theora is essentially a fork of On2’s video technology, a souped-up version of VP3.

  5. I know Apple has approached the Xiph guys regarding the patent situation of the Theora codec – specifically, what appear to be loopholes in the patent agreement language: http://lists.xiph.org/pipermai.....02415.html

    An additional key quote from that message: “I’m doing some cursory research into Theora’s IP status in preparation
    for asking Apple to reconsider the possibility of shipping an implementation” – Apple really might support Theora if the patent situation is cleared up.

    If Google owned On2, they could in theory resolve Apple’s concerns about On2 patents by publishing an updated license which does not have the patent concerns.

    Of course, there’s also the issue of their newer codecs, and whether these might replace them in some way (although there’s probably more of a risk of third-party patent issues on their newer codecs).

  6. @Toe: There’s 2 key difference between the argument against Theora vs. VP7. First Google has the money and manpower to disprove these arguments, something Theora never really had. Secondly On2 is the originator of the source for both Theora and VP7. While VP3 was open sourced and become Theora, we don’t know the full evolution of the code, hence the questions being raised. Now that On2 is purchased by Google, they have access to the whole story. That’s a big difference when lawyers are analyzing and trying to figure out what they can do.

  7. The thing that get me about this buyout is, aside from the fact that it’s out of nowhere, the ball is in Google’s court for what happens with the technologies during the fourth quarter. Google could hand the technologies to Xiph with more resources to extend the codec’s future. They could also assume that they are the best to handle the tech after open-sourcing it and retain some overhead control of them… They could just submit the tech as is to w3c as a RF format for video, and let others support it at there leisure or…. do nothing.
    The closer that September, 30 comes (The merger is to close at the end of the fourth quarter, completed hopefully) the more that we known about what direction that Google wants to take with On2’s assets.

    A nice thing here would be to see what the Founders to On2 feel about this buyout, just to get a little perspective on the situation.

    @dave: I am not sure that Ogg could be extended in that manner. I have been under the impression that the OGG skeleton is specially made to transport Theroa and Vorbis payloads. If it can been extended for other codec’s is unknown, but given Xiph’s understanding of the On2 code (at lease with VP3) and plans with OGG Dirac, it’s a possibility that another video payload might not overly difficult if Google makes a donation with the acquired technologies from On2… or a nightmare to adapt for such.

  8. Robert: Is there something stopping Google from using that same money and manpower to disprove those arguments against Theora?

    Either way, they’re gonna have to dig into a codebase they didn’t create themselves. It’s not like they didn’t already have access to Theora’s source code. “We don’t know the full evolution of the code”? Isn’t that what SVN history is for? And I’d bet that Monty & co would be willing to explain their changes.

    Plus I’d imagine that the cost of doing a full investigation of Theora would be less than the cost of doing a full investigation of VP# plus the $106 million buyout price.

  9. @Toe: note that Google won’t have to “dig into a codebase they didn’t create themselves”, as they’ve also bought the people who created it, and should therefore know it best.

    The more I read about VP7 and VP8 the more I think video conferencing and mobile playback were big motivators here. Hopefully that was just a cherry on top of the ability to release a royalty-free codec which is one of the VP families claims to fame. Apparently most other “independent” you might have heard of licence key technology from MPEG rather than work around them as On2 did.

  10. @Duv: Ogg can contain any codec, one just has to specify how it is embedded, there is i.e. Ogg Dirac. Xiph.Org only provides mappings for open and free codecs. so if there is an open VP6/VP7/VP8 variant. providing a way to embed this in Ogg along with Vorbis, Speex or CELT will be possible.

  11. Huh. Didn’t see that one coming. Google has a pretty good track record on openness, but what they do with On2’s technologies will finally decide the kind of company they really are.

    My fingers are firmly crossed.

  12. @Toe: AFAIK when it was open sourced, they didn’t provide documentation of every line of code and it’s origin. Generally speaking open sourcing code generally happens as a tarball or a new public repo to prevent svn comments which may contain proprietary information (business strategy, partner info, etc.) from leaking out.

    The whole SCO/Linux case was essentially about the origin of some code, it’s really not that different of a situation.

    What happened after it was open sourced is generally less of a concern since the process is so open. It’s the closed source origin that tends to be more troublesome.

  13. @Robert: So basically you’re suggesting that there may have already been an IP infringement in VP3 in its original open-sourced form? If that’s the case, then Google just bought themselves a bomb that could blow up in their faces. 🙂

  14. @Toe: No, I’m suggesting that nobody knows definitively. And no, that doesn’t mean anything negative for Google. Just something they will be evaluating before making any moves.

    • Gif was first but it had 2 problems. One was that it had coihypgrt issues and the other was that it an indexed system with fairly rubbish compression by todays standards. It’s quite good at pictures with lots of solid colours but no use for photos. Then JPG turns up which is great for photos and is effectivly open source. Mass adoption ensued. Then PNG was a next-gen crack at the GIF marketplace, with better compression and other goodies. Even better was the lack of coihypgrt issues.References :

  15. IMHO this is simply about having some deep patents to use in defense if needed later. I don’t see a sudden move from h264, though who knows what holds down the line several years on as the h264 license terms change

  16. There are 2-3 lawsuits underway to fight this deal as On2 Shareholders do not want to end up getting screwed. It should get interesting as this story is far from over.

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