Google Inc. announced it has acquired online video-sharing site YouTube Inc. for $1.65 billion in a stock-for-stock transaction.

"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, CEO 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."

When the acquisition is complete, YouTube will retain its distinct brand identity.

Google also announced a music video deal with Warner Music and Sony BMG.

David Eun, Google's vice president of content partnerships, says, "This agreement also allows us to realize a threefold goal of meeting online user demand, providing advertisers with a new way to communicate with their customers, and giving content holders a way to monetize their content; we achieve this by combining Google's network of hundreds of thousands of advertisers, unparalleled distribution via our publisher network and high quality content like Warner Music Group's music-video library.

Separately, YouTube, which serves 100 million videos per day, announced a deal with Universal Music Group and CBS to distribute videos on the site. The popular video site also has a similar deal with Warner Music Group.

YouTube and CBS will share revenue from ad sponsorships of CBS Videos, according to the Associated Press.

"We're now able to offer select entertainment, news and sports programming to a new significant audience, get paid for it, and learn a few things along the way," says Leslie Moonves, president and chief executive of CBS.