Google Inc said it would acquire On2 Technologies Inc, a maker of video compression technology, in a stock deal valued at about $106.5 million.

Under the agreement, each outstanding common share of On2 will be converted into 60 cents worth of Google Class A common stock.

The 60 cents per share figure represents a premium of about 54 percent over On2's closing price on Tuesday.

Shares of On2 rose to 58 cents in premarket trade on Wednesday.

Separately, Google has sold its Google Radio Automation business, which created software to automate broadcast radio programing, to privately held WideOrbit Inc. Terms were not disclosed.

In February, Google abandoned its efforts to sell advertising for broadcast radio stations, acknowledging that the three-year project has failed.

(Reporting by Franklin Paul; Editing by Lisa Von Ahn)

Google