Web search leader Google has closed its $1.65 billion acquisition of video-sharing site Youtube to set a new record in the valuation for user-generated media sites.
Google said it had issued 3,217,560 shares to pay for Youtube. It also paid restricted stock units, options and a warrant that can be converted into 442,210 shares of Google's common stock.
The $1.65 billion stock deal included around $15 million in funding that Google provided to Youtube between signing the deal in early October and closing the deal this month.
One-eighth of the equity, or roughly $200 million, will be held in escrow as security on certain unspecified indemnification obligations, the Google statement said.
Youtube has enjoyed explosive growth over the past year and has seen grassroots online video stars emerge as Web viewers seek out short-form comic sketches created by other users. Youtube says it serves up more than 100 million videos a day.
But its popularity has also been fuelled by the widespread availability of copyrighted TV episodes and music videos for which media companies say they should be compensated.
Media industry sources in recent weeks have said that some portion of the price paid by Google would be reserved to settle potential copyright infringement suits aimed at Youtube .
Google and Youtube have said they are racing to strike deals with video producers that would allow them to share in revenue when such programming appears on Youtube.