In the world of relentless technological advancement, acquisitions have become increasingly important for major technology firms around the globe – not only to broaden their businesses, but also to keep their innovation engine thriving.
GOOGLE (or rather ‘ALPHABET’, We’re still getting used to the name!), even before it was a household name, made this strategy their modus operandi and has grown tremendously because of it. Larry Page wrote about it in the founder’s letter 12 years ago :
“Expect us to make smaller bets in areas that might seem very speculative or even strange when compared to our current businesses.”
Many of the most used products of Google have come from its acquisitions – YouTube, Android and Google Blogger, to name a few.
Not only it has allowed Google to get access to talented workforce, but also has helped immensely in launching new products at a breakneck pace. Google has acquired nearly 200 companies in the past 15 years or so, with no sign of slowing down.
Google uses a ‘toothbrush test’ – where Larry Page insists that new products must be important enough that people will use them at least twice a day.
Google made its first acquisition back in 2001 – their largest acquisition so far has been ‘Motorola Mobility’, for $12.5 billion in 2011, which the company eventually sold to Chinese technology firm Lenovo in Jan 2014 for $2.91 billion. Google has spent an estimated $30 billion on acquisitions. Google acquired more than 40 companies in 2014, most by them in a single year, and 36 companies in 2010 and 33 in 2011.
With a market cap of nearly $500 billion, Google has seemingly bought everything from AI, VR, AR, Cloud Computing, Robotics, IOT, music streaming , to child-friendly apps and many others. Google went on shopping spree during Christmas of 2013 (Dec-Jan) and made 12 acquisitions in two months including 8 robotic technology companies. CEO of Google, Sundar Pichai made this strategy even clearer, in a letter to shareholders recently, wherein he wrote :
“We will move from mobile first to an AI [Artificial Intelligence] first world”
Let’s take a look at major acquisitions Google has made so far –
Google’s Major Focus Areas: Android, Google X, Google+, YouTube, Maps and Earth
Every merger or acquisition needs a well thought out deal thesis and how it adds value to the overall strategy of the company. Google, here again, seems to have cracked the formula and have made acquisitions based on the evolution of new technologies in the field of their existing internal teams and can also act as a catalyst to their ever-growing product lines. Here is the list of number of acquisitions Google has done under each of its major teams –
Disinvestments made by Google
Google not only makes acquisitions but it revisits and sees which acquisitions are working for them and which are not. Following are the five business units which Google has divested from –
Y Combinator and SV Angel have had the most exits from Google’s acquisitions
Investors make their bets on startups and we have seen a lot of investment firms making their exits owing to the acquisitions made by Google. According to Tracxn data, more than 200 firms have had exits because of the acquisitions made by Google. Here’s a list of investment firms who have benefited the most.
