Google has laid speculation to rest - it is buying YouTube for $1.65 billion in a stock transaction.

YouTube operates a wildly popular website showing original videos in a range from amateurish to professional. It will continue to operate independently after the Google acquisition "to preserve its successful brand and passionate community", Google said on Monday when it announced the deal.

Bringing YouTube into the ever-growing Google empire will mean that users have a "better, more comprehensive experience" when they upload, watch and share videos, Google said. It will also provide more opportunities for professional content owners to get their work out to a wider audience, the company said.

The two have similar corporate values in that they are both committed to users first and also to innovation, Google CEO (CEO) Eric Schmidt said in the announcement. "Together, we are natural partners to offer a compelling media entertainment service," he said.

YouTube will benefit from Google's global reach and technology know-how, said its co-founder and CEO Chad Hurley.