Google has announced a deal to acquire On2, which develops compression technology for use in web video.

The purchase, which is valued at around $106.5 million, has been made so that the search engine can integrate video compression technology into its web platform, video engineering director Jeremy Doig said on the company's blog.

As the deal is yet to be approved by the Securities and Exchange Commission in the US and On2's stockholders, details of what Google plans to use with the technology have not been announced.

However, the firm expects the transaction to be completed within the fourth quarter of the year.

"We are committed to innovation in video quality on the web, and we believe that On2's team and technology will help us further that goal," vice-president of product management at Google Sundar Pichai stated.

Interim chief executive officer of On2 Matt Frost added that the company is "thrilled" to be joining the search giant, which he described as "one of the world's most innovative clients".

Earlier this month, Google announced that it has made some changes to its image search service, allowing users to find images by colour or size.