Report: A Review of Google's Fast-Speed Spending Spree

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Google acquired over 40 companies in 2010 and more than 100 since it was first incorporated in 1998. (Photo: Robert Bichara)
Google acquired over 40 companies in 2010 and more than 100 since it was first incorporated in 1998. (Photo: Robert Bichara)

BUSINESS

  • Google on buying spree that could impair dominance in search engine market
  • Google’s long list of successful company acquisitions have been instrumental for profitability
  • Anti-trust suits pending are worldwide in scope

Here are a few headlines on the world’s No. 1 search engine: "Google buys graphical display company AdMeld for $400 million"; "Google buys AdMob for $750 million"; "Google buys YouTube for $1.6 billion"; and in its biggest deal of all - "The world’s biggest and most successful search engine purchases Motorola Mobility for $12.5 billion."

Google acquired over 40 companies in 2010 and more than 100 so far since it was first incorporated as a privately held business in 1998 by Larry Page and Sergey Brin, often dubbed the “Google Guys” who were then PhD candidates at Stanford University.

“This is obviously smart: Google is a great acquirer, and most of its best products have come through acquisitions: DoubleClick, Android, YouTube and even AdSense, each of which are billion-dollar businesses now,” reports BusinessInsider.com.

According to ComputerWorld: “Google's traditional acquisition strategy identifies small groups of talented people, such as the creators of Android, who can grow into much more with the resources of Google behind them.” Google's VP of Corporate Development David Lawee told Reuters in 2010 that the tech giant's aggressive strategy is "paying off huge."

No doubt that Google has a voracious appetite. But some companies are fighting back. “Google may well be headed for its own antitrust collision. It is very dominant in search and even more so in search monetization. There are other markets like mapping and related technologies where it appears to be developing a dominant position,” Fred Wilson, a venture capitalist, told The New York Times.

French Internet Company Among Those Suing Google

One of the latest to bite back is French internet company iplusV, who is suing Google for “unfairly shutting out competitors,” claiming damages of $421 million. The company bases this on what it says it lost due to Google’s actions. Bruno Guillard, the founder of 1plusV, said Google made some of his sites impossible to find through its search engine, thus taking away the ability of the sites to generate advertising revenue.

Google is facing similar questions in a formal investigation by the European Commission that began last year and in another investigation confirmed by the Federal Trade Commission in Washington.

Google’s share of the search market in parts of Europe is as much as 90%, according to Boston.com. Google has said that its products allow internet users to find the information they are seeking as quickly as possible, and that it is working closely with the European Commission to explain its business.

There are various reports about the US Justice Department investigating different Google acquisitions, but perhaps the most publicized one involved its $700 million acquisition of the flight search software maker ITA Software.

The Justice Department after an eight-month investigation approved the sale but added conditions. Among other stipulations, Justice ruled that Google would have to continue to license the new software to other companies. Another requirement was that Google develop other products and offer them to competitors.

The regulators also said Google must develop a formal process for complaints, and submit to government monitoring that it meets these conditions. These conditions are in place for five years.

According to some legal experts, this could set the stage for regulators to collect information that could be used in a broader antitrust case.  “It is an intrusive settlement, especially to the degree it requires Google to help out its rivals,” said Keith N. Hylton, an antitrust expert at the Boston University School of Law. “But Google can’t be surprised by the Justice Department’s stance in this case. Google knows that this kind of scrutiny is its future."

Key Statistics – Google Acquisitions

  • Google has been on an acquisition spree since it was founded, spending $1.8 billion on more than 40 companies in 2010, according to Reuters.
  • The vast majority of Google's revenue, which totaled roughly $29 billion in 2010, comes from small ads that appear alongside its search results, Reuters says.
  • Google has stepped up efforts to tap into the display advertising market, saying its display advertising business was generating revenue at an annualized run rate of $2.5 billion.
  • Google's largest buy was Motorola Mobility for $12.5 billion.

By David Wilkening for
David Wilkening is a former newspaperman who worked in Chicago, Detroit and Orlando. He now specializes in travel and real-estate business writing.

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