The race to pick a codec that will service the HTML5/canvas video initiative is heating up as Google has just acquired On2, the video compression firm with a stable of quality desktop and mobile codecs.

If would be great if Google decides to open-source On2’s VP7 and VP8 video codecs and free them up as the worldwide video codec standards, thus becoming alternatives to the proprietary and licenced H264 codecs. On2 has always claimed VP7 is better quality than H264 at the same bitrate.

Also noteworthy: Google could use the VP8 codec for YouTube in HTML5 mode, basically forcing its many users to upgrade to HTML5-compliant browsers instead of using Flash formats.

The XHTML 2 working group is being suspended by the W3C at year’s end to focus resources on HTML 5. A good move, since I think even many web devs don’t understand the difference.

The goal was to have a single video codec present in every major browser. This would allow web developers to include <video> elements without worrying about plugins or browser compatability. Unfortunately, it doesn’t seem like that will happen, with browser makers split between H.264 and Ogg Theora.

The quick version: Apple won’t use Ogg Theora because of hardware comparability and patent exposure, Opera won’t use H.264 because of cost, and Mozilla won’t use H.264 because of licensing restrictions. Microsoft won’t use H.264 for the same reason as Mozilla, but also hasn’t commented on supporting <video> at all. Google will support both Theora and H.264 in Chrome, but Chromium won’t have the latter because of licensing. Also, Theora isn’t up to snuff for YouTube’s volume.

Ian Hickson, reasonably, says that forcing Theora into the HTML5 spec won’t convince Apple to get on board, and all the others will do it anyway. Therefore, no codec will be officially specified in HTML5. The hope is that over time, one of the two formats will become the de facto standard.

Sigh.

Google betting big on HTML5 (who’s excited? this guy.)