First-order effects

• Google takes control of On2's compression portfolio and its licensing business, meaning existing licensees — most prominently Adobe, whose Flash carries On2 codecs per NewTeeVee's 'Watch Out, Flash' framing — now have their video-format roadmap set by a direct competitor.
• The deal removes ONT as an independent public company, folding a specialist codec vendor into a buyer that does not need it to turn a profit.

Second-order effects

• With Chrome OS unveiled two days earlier and the 'Going Google' campaign aimed at Microsoft, in-house compression gives Google's browser-and-OS push a native answer to Flash's media layer, forcing Adobe to defend the plugin's remaining monopoly on web video delivery.
• Rival codec licensors face a new dynamic: a platform giant that can absorb the technology outright and distribute it cheaply at YouTube scale, compressing the licensing economics the incumbents charge for.

Third-order effects

• If platform owners keep buying the video stack piece by piece, codec selection stops being a standards-body decision and becomes a balance-sheet weapon, with openly licensed formats as the wedge against paid ones.
• The $106 million price point is a data point in itself: foundational media infrastructure can change hands cheaply when the buyer values it strategically, making small-cap companies with core IP natural targets for the largest internet firms.