Google has finalised its acquisition of YouTube for $1.65bn in Google stock.  

The search firm said that 12.5 per cent, or $206m, of the price paid for YouTube will be held in escrow for one year to "secure certain indemnification obligations". 

"YouTube and Google will together provide innovative and exciting services for our users that will add a new dimension to online media entertainment," said Google chief executive Eric Schmidt.

"We look forward to working with content creators and owners large and small to harness the power of the internet to promote, distribute and monetise their content."

Google has already said that it plans to launch a mobile version of YouTube. 

YouTube is the world's largest video site, serving over 100 million videos a day.

But the company faces a major copyright challenge as users have uploaded numerous television shows and other materials that infringe on copyrights. 

Google is currently facing one lawsuit for its video service, as is YouTube.