Google's Biggest Acquisitions So Far, And What They Became

Google's $US12.5 billion purchase of Motorola will be its biggest acquisition ever — more than four times the size of DoubleClick, the previous leader.

But over the last decade, Google has been one of the biggest — and most successful — acquirers in the tech industry, and owes a lot of its success to these smart buys. Its core search advertising platform and most of its biggest new businesses, including Android, YouTube, and display advertising, all come from other companies.

Here's Google's top 16 acquisitions by value and show what happened to them.

#16: Android mobile platform, "up to" $US50 million (estimated) Last October, Google M&A chief David Lawee called the 2005 acquisition of Android — the mobile phone platform started by ex-Danger leader Andy Rubin — its "best deal ever". Less than three years after launch, it has become the most popular smartphone platform in the world.

#15: Aardvark social search, $US50 million Google paid about $US50 million for social search Q&A service Aardvark in February 2010, but hasn't really done much with it yet. However, there are hints in Google+ code that suggest that Aardvark — or what's left of it — will soon be integrated into Google's new social network.

#14: Jambool social payment platform, $US70 million Google bought this mobile-payment platform in August 2010. Onlookers assumed it would be part of Google's social networking efforts. In fact, the team was put to work on in-app payments, and earlier this month Google said it would shut down the Jambool Social Gold service in May, and replace it with its own in-app payment system.

#13: Invite Media ad platform, $US81 million  Google bought this ad technology company last June, making its 24-year-old founder Nat Turner a young millionaire. Invite is a demand-side platform (DSP), which helps ad buyers place their wares on ad exchanges, and hasn't yet been integrated into Google's other ad-buying products. Google recently wrote a blog post explaining when advertisers should use Invite versus the Google Display Network.

#12: Feedburner RSS tools, $US100 million In June 2007, Google paid $US100 million for this company, which creates tools for advertisers and users to manage RSS feeds. It's still around, but RSS has become less interesting in the wake of Twitter — which is now run by former Feedburner founder Dick Costolo.

#11: Like.com visual search, $US100 million+ Google bought this visual search company last summer, and put the team to work building a search vertical for women's fashion called Boutiques.com.

#9 (tie): Applied Semantics, $US102 million  David Lawee may think Android is Google's best acquisition, but from a pure ROI perspective it's hard to beat Applied Semantics, which built AdSense — the paid search advertising platform that's still responsible for most of Google's revenue and profits.

#9 (tie): dMarc automated radio ad placement, $US102 million This one was a mistake: in 2006, Google paid $US102 million for this platform for automatic placement of radio ads, and offered a whopping guarantee of up to $US1.1 billion based on performance. But the business never took off, and Google shut the program down in mid-2009.

#8: On2 video compression, $US133 million  Google tried to buy this video compression company for $US106 million, but its shareholders held out for a higher price and eventually got $US133 million in January 2010. Last year, Google announced it would open-source the VP8 video codec it acquired with On2, and rename it WebM. Google has since tried to push WebM as a replacement for H.264, a much more widely used standard for web video.

#7: Slide social gaming, $US228 million (estimated) Google bought the social gaming company behind SuperPoke last August for $US228 million (the price was originally reported at $US182 million). Slide still operates as a separate entity within Google, and doesn't seem to be contributing much to Google+, the company's new social networking initiative. Instead, it's out there creating standalone mobile products like photo-sharing app Photovine.

#6: Admeld, real-time bidding exchange for online advertising, $US400 million (if regulators let it go through)  Google announced plans to buy Admeld in June to boost its display advertising business. Regulators announced last month that they're taking a close look at the deal, but that doesn't mean it will be blocked — regulators also took a second look at ITA and DoubleClick, and both of those deals eventually closed.

#5: Postini email security and services, $US625 million Google bought this company in June 2007 and integrated its add-on email services, like spam-blocking and archiving, into Gmail for business users. It's been a critical part of Google's enterprise apps business ever since.

#4: ITA travel service, $US700 million Google made a $US700 million bid for ITA, which compiles flight information for airlines, travel agencies — and rival search engines. The bid garnered complaints from competitors who rely on ITA's service, but the feds eventually approved it with conditions.

#3: AdMob mobile advertising, $US750 million  Android is all about increasing mobile search usage today, but Google hopes to make mobile advertising in general into a huge business. That's why it paid $US750 million for AdMob in November 2009. Since then, however, AdMob execs have left — including former CEO Omar Hamoui (pictured here) — and sources have said the integration isn't going so well.

#2: YouTube video sharing site, $US1.65 billion  It looks like a no-brainer now, but when Google bought the video-sharing service in 2009, it was a huge risk: YouTube was full of copyrighted content that users uploaded without permission, and faced potentially billions in lawsuits. Google skillfully negotiated contracts with content owners and instituted a reasonable takedown policy, and as a result YouTube has thrived — analysts estimate it's now profitable and earns more than $US1 billion a year. This year, Google is increasing headcount by 30 per cent and is hiring tons of new ad sales people.

#1: DoubleClick display ad technology, $US3.1 billion The 2007 acquisition of DoubleClick launched Google into the display advertising business. It's been a mixed bag. Google boasts that it's making $US2.5 billion a year from display, but about $US1 billion of that is from YouTube. Also, display advertising isn't nearly as profitable for Google as its core search advertising business. Still, display advertising is a big business, and Google has to be in it. Buying DoubleClick was a lot faster and easier than building a display business from scratch.

Now, check out what Google will get from its biggest acquisition ever: Here's Everything Google Just Bought From Motorola For $US12.5 Billion

Republished with permission from The Business Insider


Comments

    Only 1 question.....is google really making profit out of these. If so are they really making the profits upto their expectations???
    For EG: Is android making any profit....its a open source....other than income from Apps i don't think they have no income source.....But i never paid for a app only side loading them by downloading the APK's from google ;)

      I'm open for correction here - but from what I'm aware of, while Android itself is open source and free of charge - Android has a firm control over in-app advertising, and takes a slice of paid apps.

      So in essence, Google makes its money not from you obtaining Android, but using it.

        The estimates on licensing for patents for each Android handset keep rising. At last count, MS make more from Android than WP7 per unit.. that's +$15 to MS alone. 6 months ago estimates for cost per unit were between $40-$80 per unit depending on existing patents held by the OEMs.. and then there's the legal fees. There is also a question over the core Google apps (G-mail, maps, etc.) which are suspected to come at an additional cost to the OEMs.

        Android is far from free, and a massive legal nightmare. Moto BTW, have just been succesfully sued by both MS and Apple. Thier 17000 strong patent portfolio clearly isn't the protective shield the pundits are making it out to be.. not when it comes to operating systems.

      I'm pretty sure the phone manufacturers have to pay an Android license fee and a separate fee for each update.

      So each phone with Android phones Google get income for every one and then get more when a company updates them to a new version.

      With Google buying Motorola it could mean that a certain phone manufacturer gets updates first and can provide them for nothing and they will be the most up to date and optimised for Motorola's choice of hardware.

      Expect Motorola to become the number one phone company in the years to come, especially with Android users.

        The majority of the companies that produce android phones do not pay Google for the use of android. While Issac (below) is correct, the common misconception is that Android is actually created by Google, and that Google holds the open sources licence. These are both incorrect. The OHA (open handset Alliance) actually released android, Google is simply the driving force behind it, as well as a key developer. The companies that use android are virtually all members of the OHA, and thus they do not pay licensing fees or royalties, at least not for android itself. They do spend allot of money on patent lawsuits, and many have struck deals with Microsoft and apple, agreeing to pay royalties. However, the use of android os can cut the cost of developing a smart phone by up to 90%, and as they are sold at the same price as the other smart phones, it leaves an incredible amount of room to pay the royalties, and still make a large profit.

      using an open source licensed item for personal use is free however for financial gain one must pay royalties to owners of the license

      Google's an advertising company. The bulk of their money comes from ads. Which is why they can afford to give out so many products 'free', they offset it by having more eyeballs on their services than any other.

    Thought that wasn't right, according to Wikipedia (the best source ever), Youtube was bought by the big G in 2006.

    Ah, a company that doesn't know how innovate and so buys a bunch of companies to do it for them, classy.

      classier than just copying them without paying for the right to do so ...

    Any new acquisitions by Google?

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