The deal closed after gaining approval from On2 shareholders and was valued at US$124.6 million, Google said in a brief statement late Friday. The figure was about $18 million more than the value stated when the companies last year.

On2 provides video compression technologies for mobile video, embedded devices, Adobe Flash Player and VoIP (voice over Internet Protocol). Its customers include Skype, Nokia, Sony and Adobe, according to its Web site.

Google last year said On2 would provide it with video compression technology and that it hoped the acquisition would help further innovation in online video quality.