Google Acquires On2

Here are a few links to the story:

Google Acquires Video Compression Technology Company On2 For $106 Million

Google to Acquire On2 Technologies

Flash which dominates web video today only uses to video codecs to stream video. H.264 (AKA MPEG4) and ON2 VP7. Technically you need to pay licensing fee's to use either.

H.264 is an open standard, which is still not free through.  There are a number of opensource versions of  the H.264 codec, most notably X.264 and JM10 (the original example code)



From Slashdot:
Free Software Foundation Urges Google To Free VP8

"The FSF have written an open letter to Google urging them to free the VP8 codec with an irrevocable royalty-free licence: 'With its purchase of the On2 video compression technology company having been completed on Wednesday February 16, 2010, Google now has the opportunity to make free video formats the standard, freeing the web from both Flash and the proprietary H.264 codec.'" Also from the letter: "The world would have a new free format unencumbered by software patents. Viewers, video creators, free software developers, hardware makers -- everyone -- would have another way to distribute video without patents, fees, and restrictions. The free video format Ogg Theora was already at least as good for web video (see a comparison) as its nonfree competitor H.264, and we never did agree with your objections to using it. But since you made the decision to purchase VP8, presumably you're confident it can meet even those objections, and using it on YouTube is a no-brainer."

A little more background
Flash and H.264: Together At Last