Good News from Google for Startups
Given the state of the startup world, getting acquired by one of the Web giants is viewed as a preferred way to cash in on one's labors—and no one is with a bigger wallet than Google (GOOG). Now the company, it seems, is looking to open its wallet even wider, and that is good news for Web startups.
In its latest quarterly filing with the Securities & Exchange Commission, Google said that during the first three months of 2010, it bought nine companies for $145 million, including Docverse and Aardvark.In addition to these nine companies, Google paid $123 million in stock and cash for On2 Technologies and is still awaiting approval of its $750 million offer for mobile ad network AdMob. That's old news. What should matter to startups is this bit buried deep inside the filing:
"We expect to increase the number of acquisitions we make in the remainder of 2010 compared to 2009. These acquisitions generally enhance the breadth and depth of our expertise in engineering and other functional areas, our technologies, and our product offerings."
This is in keeping with what Google Chief Executive Eric Schmidt said in late September 2009—that the company will buy at least one company a month.
Improving Its Mobile Ecosystem
In my analysis, Google's interested in startups specializing in mobile computing and social networking. Google has has made it clear that its mobile ecosystem is its next big opportunity. See, for instance, its acquisitions of Toronto's Bumptop, which was announced over the weekend; Israeli game company LabPixies; and mobile app maker Plink. Google will do whatever it takes to keep enhancing the Android platform.
Whether it's mobile location or some other core mobile technology, if it makes Android better than Apple's product, Google is going to find a way to buy it. If I were a betting man, I would wager that Google will spend lavishly on startups and technologies that help establish the Google payment platform and bolster the feeble Google Checkout.
Social computing is the other area where I expect Google to spend a lot of its acquisition energy. As Facebook starts to increase its social dominance over the Web, Google is going to respond by buying what it can't build. Innovative social services, especially those with an infrastructure twist, will be likely candidates for Google.
Now play fair, Google, and share your likely acquisition candidates with rest of us.
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