So, Google’s planning on using Vp8, and mozilla is as well. And they’re going to “Open” it.

Which makes the fact that Google is still funding ARM optimization for vorbis/theora interesting.

One possibility is that Google won’t entirely open VP8 up. They may open it up for software royalty free, but keep hardware optimizations as something you license from them. On2 already has chips for VP8 decoding and encoding. Or they could license the code that generates VP8 files, while making decoding fully open and free.

This way, they could leave Vorbis/Theora as the enthusiast codec that everyone can use for free, while providing a cheaper alternative to H.264 that also can be included in viewers for free.

Or it could just be two parts of google doing their own thing. *shrug*