A Mega Acquisition & a Paid Subscription Model Coming from Google?
Whenever you listen to Google CEO Eric Schmidt, you have to either;
a) pay attention to what he doesn’t say, or
b) read between the lines of what he does say
Let’s break down a couple of interesting statements the search chief told Reuters.
First up, what are Google’s plans for future acquisitions?
“My estimate would be one-a-month acquisitions and these are largely in lieu of hiring,” he said. “There may be larger acquisitions, but they really are unpredictable.”
You can bet we’ll hear about an acquisition in the $100 million range–similar to this one–very soon. In addition, you can bank on Google being in talks to buy a company with a price tag in excess of $1 billion. When he says there “may” be larger acquisitions, but they are “unpredictable” it basically means that Google is in advanced talks and just needs to agree on terms. He can’t just come out and say, “yeah we’re in the process of doing a huge deal,” because if it failed to materialize, Wall Street would start panicking that the company had lost its mojo.
OK, let’s turn to another interesting statement from Schmidt. This time regarding paid subscriptions for publishers:
“We are clearly going to see paid content models emerge, perhaps Google will be one of the companies that offers subscription services, we have thought about it some,” Schmidt said.
Guaranteed! In fact, I wouldn’t be at all surprised if Google is already testing a model that allows publishers to charge access for their content, with Google handling the entire process. Heck, many publishers are already content to hand over the keys to Google, so they’d be delighted if it can figure out how to get readers to pay a subscription.
So, to recap. Expect the announcement of a major acquisition by the end of the year and a new subscription revenue model by the end of next year.