Saying Google has deep pockets is somewhat of an understatement. Over the years it has acquired more than 100 companies (big and small) and with the kind of money it has spent on some purchases, it is clear that the search giant is not afraid to splash the cash when required. We look at some of Google’s billion dollar purchases and see how they helped the company.
YouTube was already gathering steam before Google came calling and the search giant had to fend off the likes of Microsoft and Yahoo to buy the video streaming platform for $1.65 billion in 2006. Many criticized this move, citing potential issues with copyrights and doubting the platform’s sustaining power, but Eric Schmidt was confident and it is this bullishness that has massively paid off. YouTube is not only the biggest video streaming platform today, but is also a gold mine for the company in terms of advertisement revenues.
Google bought this ad company in 2007 for $3.1 billion, which was its biggest acquisition at the time. This move was considered to be a direct attack on the likes of Yahoo, which was then the king of ad placements. Realizing the potential of revenues from ad placements on the web and the mobile platform, Google bought DoubleClick. Its ad-management software has since helped Google sell display ads across the Web.
In addition to the Android platform, Google realized that to truly compete with Apple it would have to dabble into hardware. This prompted it to acquire struggling mobile maker Motorola for $12.5 billion, making it the company’s biggest buy till date. The acquisition not only gave Google access to Motorola’s hardware expertise, but also to its patents, which has been essential for the company and its OEM partners to fend off Apple’s copyright infringement allegations. The first device to come out of this nuptial was the Motorola X, followed by the affordable Moto G more recently. Both these devices are built according to Google’s mantra, which gives more importance to user experience.
Though Google’s Maps was the biggest mapping application available, it lacked that crucial social element. Waze, on the other hand, was making waves for the SoLo aspect it brought to mapping, wherein users could share information on traffic jams, road conditions or accidents in real-time. For Apple, acquiring Waze would have meant a much-needed improvement for its bug-riddled Apple Maps, while Facebook could have used the technology to expand its presence on the social platforms. For Google though, it would not only add the SoLo aspect to its Maps, but also give it constant information on where people are going. This is why it fought off Facebook and Apple to acquire Israeli-startup for a billion dollars. It also promptly added Waze’s technology to its Google Maps to score a point against rivals like Apple Maps and HERE Maps among others.
With its latest $3.2 billion acquisition, Google is clearly looking at the future. If the recently concluded CES is anything to go by, the phenomenon called ‘Internet of Things’, wherein every home appliance is connected and controllable via one’s smartphone, is not too far away. And this is why Google’s acquisition of Nest makes sense. The latter’s vision to bring design and utility to unnoticed devices at home is important, while Google is also ensuring it doesn’t again fail in its attempts to enter people’s home like it did with the Google TV, Nexus Q and the PowerMeter.