5 ms·

In 2011 Google Spent $1.9 Billion Acquiring 79 Companies

44 points by profitbaron 15y ago

garethsprice 15y ago
To save someone else a few seconds with a calculator, that's an average of just over 24 million per acquisition. Not that each was acquired for an equal amount.
- jimminy 15y ago
  And when you factor out just the ITA acquisition, as it was pointed out in the article, it drops to just over 15 million per acquisition.
- CWIZO 15y ago
  What about Motorola Mobile that Google took over? Is that part of this $1.9 bilion?
  - profitbaron 15y ago
    The $1.9 Billion Google spent on acquistions excludes the Motorola deal. As the Motorola deal is expected to close sometime in 2012, so their $12.5 Billion acquistion would be included in the 2012 numbers - of course this is still up for regulatory approval.
fpgeek 15y ago
And that's only counting the acquisitions that closed...
- freehunter 15y ago
  Well obviously. You could say the same thing year over year. If we were counting the ones that were started and not yet completed, it would just subtract from the amount of the next year.
ThaddeusQuay2 15y ago
2011 was the year that Google gobbled up drop.io, and buried it deep in the room known as "Stuff We'll Never Use, And Neither Will Anyone Else". NOTE TO SELF: Startup Idea: Create a new drop.io, and combine it with some of the features of MegaUpload. Call it MegaDrop.
- samwillis 15y ago
  Facebook brought drop.io in October 2010
  - ThaddeusQuay2 15y ago
    Thanks for the correction. I had this nagging feeling that it might have been 2010, as I tend to lose track of time, and I could have sworn that drop.io's announcement said "Google". Anyway, we could use another drop.io, for people who don't want to be tied to Google's ecosystem.
    - samwillis 15y ago
      A new drop.io would be awesome, it was a very good product and I haven't found anything else like it yet. Has anyone found anything similar?
      - ThaddeusQuay2 15y ago
        What were the main features that you liked about it, but haven't found elsewhere? I liked being able to email files directly to the drop. I suggest that we make a short list of awesome features, and maybe someone will take up the cause.
  - 00101000100101 15y ago
    HAH!
SquareWheel 15y ago
I don't think this will continue into 2012, with the way Larry is focusing on the core products.
- profitbaron 15y ago
  It will continue in 2012 as in the filing Google said, “Acquisitions will also remain an important component of our strategy and use of capital, and we expect our current pace of acquisitions to continue."
michaelochurch 15y ago
Here's why acq-hiring is a disaster. Let's say FatFrog is the acquirer and BuzzFly is the acquired. BuzzFly's founders usually have earnouts ("golden handcuffs") and thus have an incentive to stay, but merging them with FatFrog's executive hierarchy is difficult and rocky. They tend to be resented, especially if there's an age difference (i.e. the BuzzFly founders are 25 and FatFrog execs are 40+). The executive merging is difficult in acq-hires because no one will take orders from a 26-year-old whose IUsedThisToilet virtual bathroom graffiti app just got bought for $87 million. BuzzFly's top programmers, who are by this point the vitality of the organization, don't have the huge amounts of stock that would be incentive to stay. Their company also just got acquired so this is a great time to go for a major external promotion, especially since titles in a soon-to-be-eaten company are pretty easy to self-upgrade. So the top engineers face the "decision" between (a) use the transient "hotness" of their startup name to get a huge promotion to a VP-level role in another company, or (b) become some subordinate Software Engineer, Level 4.B.ii at FatFrog while watching their original work (whatever remains of BuzzFly) goes into maintenance mode... and has to be rewritten in C++. The weakest engineers, who never could have gotten jobs at FatFrog, but were able to get onto the BuzzFly train when Buzz was desperate, stay along. So the actual result of an acq-hire is that the execs are rejected like a bad transplant, the best engineers bolt, and the worst ones stay on board.
- badclient 15y ago
  Here's why your post is a disaster in terms of faulty assumptions. * Most acquired founders aren't made execs. Most end up as Product Managers or team leaders. * The weak engineers from acquired companies can't sneak into google. They must go through the typical Google interview process. use the transient "hotness" of their startup name to get a huge promotion to a VP-level role in another company * ^ Sorry but this is just unheard of. Getting VP-level role at top companies is very hard and if a developer of an acquired company could score a VP-level role elsewhere after the acquisition, he could probably do so before the acquisition. It's got little to do with acquisition. The guy must just be good. no one will take orders from a 26-year-old whose IUsedThisToilet * ^ You are using the most extreme stereotype of what is acquired. Now, I understand that your example of IUsedThisToilet wasn't mean to be taken literally but I question why you'd make up a name than use one of many examples from an actual acquisition. Of course, making up a name like IUsedThisToilet helps you with your argument. Only it is not rooted in reality.
mace 15y ago
It also spent spent $9.7 million on lobbying in 2011 (http://wapo.st/yanxMo http://wapo.st/yanxMo) The powerful is getting even more powerful. Next stop 'too big to fail'.
vannevar 15y ago
And yet that $1.9B is only a fraction of Google's cash reserves. And Apple's is nearly $100B. Corporations are hoarding cash at record levels. As of last January, the top 17 US corporate cash reserves amounted to nearly half a trillion dollars. It's not unreasonable to speculate that corporate hoarding is contributing to our flat economy, when you consider how that cash would be multiplied if it were turned loose. Companies are holding onto cash because they're afraid of slow growth because of high unemployment, which becomes a self-fulfilling prophecy when they don't invest in new business and hire more people. It also casts doubt on claims that raising corporate taxes will hurt the economy. If companies aren't spending any of the cash they already have, how will giving them more to stuff under the mattress help?
- shingen 15y ago
  That headline meme sounds impressive: corporations hoarding cash. Until you dig deeper and find out that US corporations are accumulating debt at the fastest pace in world history. Their cash is required to continue to offset the massive debt being acquired. If interest rates go up at all in the next ten years, bankruptcies will skyrocket. A lot of companies are being irresponsible with debt right now because they can issue it at hyper low rates.
  - vannevar 15y ago
    Is there a good source for historical data on this? The best I could find goes back to 1996, and while the amounts issued in 2006-2010 are high, they don't show the steep hockey-stick climb that we saw in the mortgage crisis, for instance. http://webcache.googleusercontent.com/search?q=cache:ksi3L1yHTK8J:www.sifma.org/uploadedfiles/research/statistics/statisticsfiles/corporate-us-corporate-issuance-sifma.xls+US+corporate+debt&cd=11&hl=en&ct=clnk&gl=us&client=firefox-a http://webcache.googleusercontent.com/search?q=cache:ksi3L1y...

44 points by profitbaron 15y ago

To save someone else a few seconds with a calculator, that's an average of just over 24 million per acquisition. Not that each was acquired for an equal amount.

jimminy 15y ago
And when you factor out just the ITA acquisition, as it was pointed out in the article, it drops to just over 15 million per acquisition.
CWIZO 15y ago
What about Motorola Mobile that Google took over? Is that part of this $1.9 bilion?
- profitbaron 15y ago
  The $1.9 Billion Google spent on acquistions excludes the Motorola deal. As the Motorola deal is expected to close sometime in 2012, so their $12.5 Billion acquistion would be included in the 2012 numbers - of course this is still up for regulatory approval.

fpgeek 15y ago

And that's only counting the acquisitions that closed...

freehunter 15y ago
Well obviously. You could say the same thing year over year. If we were counting the ones that were started and not yet completed, it would just subtract from the amount of the next year.

ThaddeusQuay2 15y ago

2011 was the year that Google gobbled up drop.io, and buried it deep in the room known as "Stuff We'll Never Use, And Neither Will Anyone Else". NOTE TO SELF: Startup Idea: Create a new drop.io, and combine it with some of the features of MegaUpload. Call it MegaDrop.

samwillis 15y ago
Facebook brought drop.io in October 2010
- ThaddeusQuay2 15y ago
  Thanks for the correction. I had this nagging feeling that it might have been 2010, as I tend to lose track of time, and I could have sworn that drop.io's announcement said "Google". Anyway, we could use another drop.io, for people who don't want to be tied to Google's ecosystem.
  - samwillis 15y ago
    A new drop.io would be awesome, it was a very good product and I haven't found anything else like it yet. Has anyone found anything similar?
    - ThaddeusQuay2 15y ago
      What were the main features that you liked about it, but haven't found elsewhere? I liked being able to email files directly to the drop. I suggest that we make a short list of awesome features, and maybe someone will take up the cause.
- 00101000100101 15y ago
  HAH!

SquareWheel 15y ago

I don't think this will continue into 2012, with the way Larry is focusing on the core products.

profitbaron 15y ago
It will continue in 2012 as in the filing Google said, “Acquisitions will also remain an important component of our strategy and use of capital, and we expect our current pace of acquisitions to continue."

michaelochurch 15y ago

Here's why acq-hiring is a disaster. Let's say FatFrog is the acquirer and BuzzFly is the acquired. BuzzFly's founders usually have earnouts ("golden handcuffs") and thus have an incentive to stay, but merging them with FatFrog's executive hierarchy is difficult and rocky. They tend to be resented, especially if there's an age difference (i.e. the BuzzFly founders are 25 and FatFrog execs are 40+). The executive merging is difficult in acq-hires because no one will take orders from a 26-year-old whose IUsedThisToilet virtual bathroom graffiti app just got bought for $87 million. BuzzFly's top programmers, who are by this point the vitality of the organization, don't have the huge amounts of stock that would be incentive to stay. Their company also just got acquired so this is a great time to go for a major external promotion, especially since titles in a soon-to-be-eaten company are pretty easy to self-upgrade. So the top engineers face the "decision" between (a) use the transient "hotness" of their startup name to get a huge promotion to a VP-level role in another company, or (b) become some subordinate Software Engineer, Level 4.B.ii at FatFrog while watching their original work (whatever remains of BuzzFly) goes into maintenance mode... and has to be rewritten in C++. The weakest engineers, who never could have gotten jobs at FatFrog, but were able to get onto the BuzzFly train when Buzz was desperate, stay along. So the actual result of an acq-hire is that the execs are rejected like a bad transplant, the best engineers bolt, and the worst ones stay on board.

badclient 15y ago
Here's why your post is a disaster in terms of faulty assumptions. * Most acquired founders aren't made execs. Most end up as Product Managers or team leaders. * The weak engineers from acquired companies can't sneak into google. They must go through the typical Google interview process. use the transient "hotness" of their startup name to get a huge promotion to a VP-level role in another company * ^ Sorry but this is just unheard of. Getting VP-level role at top companies is very hard and if a developer of an acquired company could score a VP-level role elsewhere after the acquisition, he could probably do so before the acquisition. It's got little to do with acquisition. The guy must just be good. no one will take orders from a 26-year-old whose IUsedThisToilet * ^ You are using the most extreme stereotype of what is acquired. Now, I understand that your example of IUsedThisToilet wasn't mean to be taken literally but I question why you'd make up a name than use one of many examples from an actual acquisition. Of course, making up a name like IUsedThisToilet helps you with your argument. Only it is not rooted in reality.

mace 15y ago

It also spent spent $9.7 million on lobbying in 2011 (http://wapo.st/yanxMo http://wapo.st/yanxMo) The powerful is getting even more powerful. Next stop 'too big to fail'.

vannevar 15y ago

And yet that $1.9B is only a fraction of Google's cash reserves. And Apple's is nearly $100B. Corporations are hoarding cash at record levels. As of last January, the top 17 US corporate cash reserves amounted to nearly half a trillion dollars. It's not unreasonable to speculate that corporate hoarding is contributing to our flat economy, when you consider how that cash would be multiplied if it were turned loose. Companies are holding onto cash because they're afraid of slow growth because of high unemployment, which becomes a self-fulfilling prophecy when they don't invest in new business and hire more people. It also casts doubt on claims that raising corporate taxes will hurt the economy. If companies aren't spending any of the cash they already have, how will giving them more to stuff under the mattress help?

shingen 15y ago
That headline meme sounds impressive: corporations hoarding cash. Until you dig deeper and find out that US corporations are accumulating debt at the fastest pace in world history. Their cash is required to continue to offset the massive debt being acquired. If interest rates go up at all in the next ten years, bankruptcies will skyrocket. A lot of companies are being irresponsible with debt right now because they can issue it at hyper low rates.
- vannevar 15y ago
  Is there a good source for historical data on this? The best I could find goes back to 1996, and while the amounts issued in 2006-2010 are high, they don't show the steep hockey-stick climb that we saw in the mortgage crisis, for instance. http://webcache.googleusercontent.com/search?q=cache:ksi3L1yHTK8J:www.sifma.org/uploadedfiles/research/statistics/statisticsfiles/corporate-us-corporate-issuance-sifma.xls+US+corporate+debt&cd=11&hl=en&ct=clnk&gl=us&client=firefox-a http://webcache.googleusercontent.com/search?q=cache:ksi3L1y...