Rocket Science of Business Acquisition: Google

 

This post is unique because here we are trying to understand a bit about how the Business Acquisition Strategies of Google. I anticipate my readers to reply to this post and share how they feel about the topic. This is my one of the experimental posts about the topics yet untouched. The data collection, analysis and presentation is my innovation and I accept any Error whole heartedly and welcome my readers to correct me. Now lets move to the topic and check what are the various trends of acquisition strategy of Google. Hope this Post works as a learning for the upcoming companies and a food for thought to future Entrepreneurs.



So let’s analyse few highlights of the acquisition trend followed by Google (Please note It is my Perspective not an official Document from Google). The below analysis is based on the list of acquisitions done by Google available in Wikipedia. Thank You Wikipedia for sharing the list. You can click here to view the complete list.

Our topic is going to be around the below highlights of my analysis:-

  • Year wise Acquisition Trend

  • Month wise Acquisition Trend

  • Analysis of Business Acquired.

 

1. Alright so let us start with Yearly trend of acquisitions done by Google.

image

Note:- The 2012 Figures are till latest acquisition done by Google in June 5, 2012.

As per the above graph we can understand that the Google acquired a whopping 53 companies in last 2 years. The pace of acquisition went slow in 2008-09 Economic slow down. But Google came out of it flying colours acquiring most companies in its history in a Year 2010 (27). Which is unbeaten as of now. 2011 is again brilliant with 26 Acquisitions in a year. If you observe a bit deeply in year 2002 no acquisitions made by Google. Reason is same Global Economic slow down in the said year. One Important Highlight visible last year the count of companies acquired by Google till June was 13 and this year it is only 4. Which we can infer that Google this year is more selective in acquiring companies. Average Yearly acquisition is ~11 Companies/Year.

 

2. Now let us move to more Interesting Graphs. Month-wise acquisition trend.

  • Which Month Google is on Shopping Spree?

  • Which Month in which Google Buy less?

Answers to these questions are in discussion below:-

 

image

 

If we see the above graph of the 113 Acquisitions made by Google between 2001-2012. It states that the Start of the financial year is like night mare for the Google Competitors as the Google is Hunting the Competitors the most with 14 Acquisitions in this month out 113. In May it usually drops which is a usual trend as every company holds its purchase to accommodate accounting and other legal administrative formalities of acquired companies. Average Monthly acquisition is ~1 Company Every month. Google usually never purchase in January Month. Seams that last quarter of the year Google usually acquire less as compared to rest of the quarters of the year. The year end accounting pressure and balancing profit/loss accounting and Balance sheet accounting makes companies to hold on the financial transactions in last quarter of a financial year.

 

1st Quarter:- Apr- June

Total Acquisitions=14+7+11=32

Monthly Avg=~11

2nd Quarter:- July- Sept

Total Acquisitions=12+12+11=35

Monthly Avg=~12

3rd Quarter:- Oct- Dec

Total Acquisitions=9+7+9=25

Monthly Avg=8

4th Quarter:- Jan- Mar

Total Acquisitions=4+6+11=21

Monthly Avg=7

 

3. Now moving to the third and final Point Business acquired by Google. Below is the segmentation of Businesses acquired by Google till date. As we see that Online advertising is the prime focus of Google considering the type of business Google is into it is an obvious choice.  All the five companies are merged to take care of AdSense & Ad words verticals. Second on priority of acquisition was Social Networking Service and all of these companies are utilized to strengthen the YouTube, Google+, Google Mobile, Google Alert Services. There are many more singlet businesses which merged in Google if discussed will lengthen the topic. I have one more interesting Table to show.

 

Business Number of Companies
Online advertising 5
Social networking service 4
Mobile software 4
Web search engine 3
Weblog software 3
Online video 3
Social gaming 2
Price comparison service 2
Presentation program 2
Map analysis 2
Security 2
Advertising 2
One deal a day service 2
Voice over IP 2
Videoconferencing 1
Social groups 1
Search engines 1
Email search 1
Touch typing 1
Facial recognition system 1
Digital coupons 1
Gadgets 1
Service provider 1
Graphics software 1
Blogging 1
HTML editor 1
Usenet 1
Image organizer 1
Photo sharing 1
In-game advertising 1
Restaurant reviews 1
Instant Messaging 1
Semantic search 1
Instantaneous search 1
DRM 1
Java/Eclipse/AJAX developer tools 1
Social media analytics service 1
Loyalty program 1
Speech synthesis 1
Computer security 1
Travel 1
Mapping 1
Video sharing 1
Media centre 1
E-book 1
Microblogging 1
Desktop environment 1
Microsoft Office files sharing site 1
Productivity Suite 1
Mobile advertising 1
Schedule management 1
Mobile apps 1
Digital video 1
Mobile browser 1
Server technology start-up 1
Mobile device manufacturer 1
Social circle organization 1
Mobile payment, NFC 1
Social Gold payment 1
Computer vision 1
Social media analytics service 1
Music rights management 1
Social Network 1
Music syncing 1
Social search 1
Customer relationship management 1
Statistical software 1
Aerial photography 1
Traffic analysis 1
Online Payment 1
Travel technology 1
Visual search engine, Mobile start-up 1
Video compression 1
Voice recognition 1
Video and Audio compression 1
Web application 1
Visual search engine 1
Broadband Internet access 1
Widget engine 1
Online spreadsheets 1
Web analytics 1
Word processor 1
Web feed 1
3D modeling software 1
Collaborative real-time editor 1
Parallel processing 1
Communications security 1
Photo editing 1
Online video platform start-up 1
Grand Total 113

This is quiet Interesting the below table shows what is the prime focus of the Google Business which lead to maximum acquisitions. Number 1 is Android and second is Youtube and third is Google+. Android/Youtube and Google+ is like three different verticals which and make Google market leaders in that field. Android is Mobile Application which is not the prime business anytime in initial days which is made Google to Purchase the Expertise of this field. Second is Youtube which needs some domain experts which can make this Huge Data Bank work Perfectly. It is a Mammoth Investment and Only a company like Google can make it possible. Third is a new dimension of Google Business Social networking which is again something which is not much of involvement from Google previously and with Google+ Google is trying to recapture the lost ground of Orkut.

Google Business Number of Companies
Android 10
YouTube 7
Google+ 6
Google Docs 5
Google Mobile 5
Google Maps 5
Google 5
AdSense 4
Google Offers 4
Google Analytics 3
Google Search 3
Blogger 3
Google+, Orkut 2
Google Voice 2
Google Talk 2
Google Books 2
DoubleClick, Invite Media 2
Internet backbone 2
Gmail 2
AdSense, AdWords 2
Google Sites 2
Picasa, Google Goggles 1
Google Goggles 1
Google Web Toolkit 1
Google Latitude 1
Google Groups 1
Android, Google TV, Patent portfolio 1
Google Wallet 1
Google Maps, Google Earth 1
Google, Google+ 1
Google Advisor 1
iGoogle 1
WebRTC 1
Picasa 1
DoubleClick 1
Google Groups, Gmail 1
Google Places, Google Maps 1
Google Wave, Google Docs 1
Google Product Search 1
Google, Google Alert 1
Google Chrome 1
Google Flights 1
FeedBurner 1
GoogleTV 1
Google Sketchup 1
iGoogle, Android 1
Google Spreadsheet 1
Panoramio 1
Google Desktop 1
Picasa, Blogger 1
Google TV 1
WebM, YouTube 1
Android, Google Chrome 1
Google Voice, Google Translate 1
Aardvark 1
Google Personalized Search 1
Grand Total 113

 

 

Key takeaways of this posts are:-

    • Hunt for the acquisition is meant for the Initial 2 Quarters of Financial Year rest 2 is meant to accommodate them.

    • Increase Acquisition when the mid level of your Business Life Cycle is reached avoid doing it in initial days.

    • Target the segment of companies to be acquired for the expertise you don’t have or you want to expand your dimension of expertise.

    •  

      I hereby close this topic here on various Business Initiatives of Google by way of acquisition. Hope you Enjoyed reading this post. Thanks for reading I had a real fun in analysing this data and make it presentable.

       

      Tele-Columnist!

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