Google Inc., the most-used Internet search engine, agreed to buy YouTube Inc. for $1.65 billion in stock, adding the largest video-sharing site on the Web and an audience that watches more than 100 million clips a day.

Founders Chad Hurley and Steve Chen and their 65 employees will join the company, Google said today in a statement. In less than two years, San Bruno, California-based YouTube has catapulted from startup to Internet icon with 34 million monthly American visitors. YouTube will operate independently, Google said.

The purchase, Google’s largest, underscores the pressure on the Mountain View, California-based company from startups such as YouTube and friend-finder Facebook.com, which are creating new markets for film clips and social networking. The acquisition also builds on Google’s strategy to add more content to attract advertisers.

“This is the quick entry for Google into becoming Google TV,” an analyst at market researcher Gartner Inc. in Scottsdale, Arizona, Allen Weiner, said. YouTube is “this huge TV-like platform that includes a significant amount of content.”

In total visitors, the purchase vaults Google to second place among American Internet companies from third. The two brands combined had 101 million visitors in August, according to Nielsen//NetRatings. Yahoo! Inc. sites had 106.7 million and Microsoft Corp.’s MSN Internet division had 98.5 million.

Shares of Google rose $2.50 to $431.50 in extended trading after the announcement. They rose $8.50 to $429 at 4 p.m. EST in Nasdaq Stock Market composite trading and have gained 3.4% this year.The purchase should be completed in the fourth quarter, the companies said.

Spending more than $1 billion on an acquisition is a departure for Google, which has typically bought smaller startups such as mapping software maker Keyhole Corp. and Upstartle, creator of a Web-based word processor. Google had $9.82 billion in cash and marketable securities as of June 30 and generated sales of $6.14 billion in 2005.

YouTube’s business fits Google’s strategy of using Internet content as a platform to sell ads. In December, Google agreed to buy 5% of Time Warner Inc.’s AOL to show ads to AOL search users. Google agreed in August to provide search and keyword advertising for News Corp.’s MySpace.com.

Advertisers and media companies are piling into sites like YouTube and MySpace.com to reach more users. YouTube viewers on average spend 26 minutes on the site each month, according to Nielsen. YouTube already uses ads sold by Google.

Before today’s announcement, Google and YouTube separately struck agreements with three of the world’s largest record companies to add music videos on their Web sites.

Universal Music Group, the largest music company, and Sony BMG Music Entertainment, the second-largest, agreed to let people watch their videos on YouTube. Google made deals with Sony Corp. and Warner Music Group Corp., the fourth-largest, to share advertising revenue in exchange for free streaming of videos on its Web site.

In addition, CBS Corp. agreed today to distribute video content on YouTube. NBC television already promotes programs such as “The Office” on YouTube, and Warner Music last month became the first record company to let YouTube users download copyrighted music and videos. In return, Warner Music gets a portion of advertising revenue.

Before the purchase, Google ranked seventh in online video traffic, according to ComScore Networks Inc. in Reston, Virginia. Video is emerging as an Internet service comparable to e-mail and Web search, Anthony Noto, a Goldman, Sachs & Co. analyst, said today in a note to investors.