NewTeeVee is reporting that Google will announce plans to make On2's VP8 codec open source as early as next month's Google I/O developers' conference. The move is no big surprise, and it's likely to dramatically increase adoption of VP8, which On2 claims is significantly more bandwidth-efficient than H.264. Adobe Flash currently doesn't support VP8, although given Adobe and Google's closer partnership, future support is likely. NewTeeVee reports that both Google's Chrome and Mozilla's Firefox will add VP8 support once Google makes its announcement.
VP8 could provide an alternative to H.264 for developers and content providers who are concerned about future changes in MPEG LA's licensing policies, and to Ogg Theora for those who believe that Theora requires significantly more bandwidth than H.264 for the same level of quality. (Google is also helping to fund an implementation of Ogg Theora for ARM processors.)
The bottom line is that VP8 and Ogg Theora would provide a solid base of royalty-free alternative video codecs, in much the same way as PNG served as a royalty-free alternative to GIF.