CONFIRMED: Google buys YouTube for 1.65 billion in stock.

Techcrunch first broke this rumor at the beginning of the weekend and has confirmed it today:

Moments ago the deal was confirmed. In their largest acquisition to date, Google has acquired YouTube for $1.65 billion in an all stock transaction. Both companies have approved the deal, which should officially close in the fourth quarter. YouTube’s 65 employees will remain with the company at YouTube’s San Bruno headquarters.

Details are also emerging that Yahoo was in the bidding war until very close to the end.

More details here.

SAN FRANCISCO (MarketWatch) - Google Inc. said Monday it's buying No. 1 Internet video sharing Web site YouTube Inc. for $1.65 billion in stock. The deal is regarded as a largely defensive one that leapfrogs Google into a leading role in a burgeoning Internet marketplace.

Marketwatch article.

CNN has it too.