Google is buying video-sharing website YouTube for $1.65bn (£883m) in shares after a weekend of speculation that a deal was in the offing.

The two companies will continue to operate independently, Google said as it announced the news on Monday.

YouTube, launched in February 2005, has grown quickly into one of the most popular websites on the internet.

It has 100 million videos viewed every day and an estimated 72 million individual visitors each month.

'Natural partners'

"The YouTube team has built an exciting and powerful media platform that complements Google's mission to organize the world's information and make it universally accessible and useful," Google chief executive Eric Schmidt said in a statement.

Google is reported to be in talks to buy popular video-sharing website YouTube for $1.6bn (£856m).

The Wall Street Journal said discussions between the two sides were at a sensitive stage and the talks could break up.

Neither Google nor YouTube have made any comment.

Launched in February 2005, YouTube has grown quickly into one of the most popular websites on the internet, with 100 million videos viewed every day.

Previous denials

Founded by three former employees of eBay's PayPal electronic payment unit, YouTube has denied previous rumours of a takeover.

YouTube chief executive Chad Hurley said earlier this year that the company was not for sale and a future share flotation was possible.

Video-sharing site YouTube has signed a deal with media giant Warner Music to allow its material to be used legally.

It means interviews and videos by Warner's artists can be used in return for a slice of advertising revenue.

The agreement also covers the use of material in homemade videos, which form a large part of YouTube's content.

Both companies hailed it as a landmark agreement, coming days after Universal Music said it was considering legal action over sites such as YouTube.

A royalty-tracking system has been developed by YouTube to detect when videos on the site are using copyrighted material and work out how much Warner is owed in advertising revenue.