For last couple of days, Google YouTube thing was in the news but finally google broke the silence and announced the acquisition for 1.6 billion USD.

Here is the part of press release:

MOUNTAIN VIEW, Calif., October 9, 2006 – Google Inc. (NASDAQ: GOOG)
announced today that it has agreed to acquire YouTube, the consumer
media company for people to watch and share original videos through a
Web experience, for $1.65 billion in a stock-for-stock transaction.
Following the acquisition, YouTube will operate independently to
preserve its successful brand and passionate community.

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 combined companies will focus on providing a better, more
comprehensive experience for users interested in uploading, watching
and sharing videos, and will offer new opportunities for professional
content owners to distribute their work to reach a vast new audience.

Read more here