Google Leads 2010 Merger and Acquisition Race



Considering that today we should learn whether all the hubbub around TechCrunch and its alleged purchase by Aol. is true, here is a snapshot of the merger and acquisition activity thus far in 2010. As you can see Google is playing this game real hard. The following chart from CBInsights is courtesy of cnet.

Google is following the lead of one of the most successful tech companies of all time, Cisco. Cisco has been smart enough over the years to understand that if they wanted a technology or the talent around a technology they would use their deep pockets to purchase those assets rather than develop them themselves. They have done this over 140 times since 1993. By constantly infusing new ideas and new ways of thinking a company can stay relevant more readily. Google seems to be working the same system to stay ahead of a rapidly changing competitive landscape in the online space.

The most curious number from the chart above is that Microsoft has acquired no companies this year. Why is that curious? It tells the story of the Microsoft mindset. They are who they are and they try to be other things from the inside out. Unfortunately for them, who they are on the inside isn’t working in the new world order of the online space thus many of their efforts to stay current have failed and created an image of a bloated cash cow dependent entity that is not an innovator.

As a result, if any company were to be purchased by Microsoft one would have to wonder what the fate of that company would ultimately be. Along the same lines as the idea of Aol. owning TechCrunch, anyone (i.e. founders and key employees) bought by Microsoft would likely being doing it for the nice cash out option rather than staying on board and becoming part of the MS machine. Whether it’s true or not the image of becoming part of Microsoft does not make many think of innovation and a great opportunity for the future. To drive that point home, do you really think that TechCrunch will be as relevant and cutting edge as it is now if Aol. owns it and Michael Arrington moves on? No way and the same goes for Microsoft purchases.

Whether the world likes it or not Google is hard at work to keep their position at or near the top of most heaps in the tech world. Maybe it really is just a Google world and we are allowed to live in it.

  • http://www.ascinfo.co.uk Alex Dsouza

    Google appears to be swayed by social buzz. Add to this apathy, the growing popularity of Facebook is giving the Giant Search a nightmare. Since 2010 beginning, Google has been consistently buying out social media companies in an effort to dominate over the mighty Facebook. I have read somewhere that Google is investing more on R &D especially in building a robust social platform. It seems that Eric has eye on ‘snatching users data from his arch rival Facebook.

    Google has no time to wait for a final social product of its own which is subject to time taking. More so, the the giant search engine has always failed in social arena. That’s why the company is acquiring mainly social companies to launch a robust social networking site to replace Facebook.

    Let’s see how Google milks the benefit from the acquired companies!

    • Greg Gray

      Is google hidind behind social-xxl.com ? Any info ?

  • Ken Jackson

    The statement about MS seems really odd. Sure they haven’t purchased any companies this year, but this year is arguably the year that they’ve gotten back on track the best.

    In 2009 they acquired 4 companies. In 2008 they acquired 16 companies. In 2007 they acquired 14 companies. In 2006 they acquired 18 companies. Was Microsoft a better comapny in those years than they are in 2010?

    I think MS has realized that you don’t buy your way to innovation. Acquiring can be a great move, but as Google has seen recently, lots of what you acquire makes it into the trash heap.

    • http://www.frankthinking.com Frank Reed

      How many of those purchase were related to the online space? MS is really a non-player outside of bing (like their announcement that they are giving up on Live Spaces and opting for WordPress instead). I’ll take Google’s trash heap plays to Microsoft’s online “strategery” any day.

      • Ken Jackson

        To answer your question… lots. But you being a self-admitted biased MS hater wouldn’t know that.

        So what does MS have in the online world outside of Bing. Hmm… Let me do a few just off the top of my head:

        1. XBox Live. One of the largest, if not most sophisticated, online gaming communities
        2. Hotmail, one of the top 3 or 4 largest online mail services. And while languishing for some time, in the past year has seen dramatic improvements.
        3. Windows Live Messenger, 330 million ACTIVE users.
        4. Microsoft BPOS. What cloud-based productivity suite has the most paying customers? It doesn’t come from Google, despite the press they get. MS BPOS is widely used, and people actually think its worth paying for.
        5. Windows Live. This is an interesting one, because MS has done somthing very different than Google. Rather than trying to do Twitter or beat Facebook. MS has decided to be a partner to them. If you use it, you’ll see they have one of the best integration stories on the planet. And its part of their WP7 story as well. The WordPress story fits this model too. Why spend money trying to outdo a very solid competitor, especially in something that is not your core competency. MS is not a blogging company. They are a platform company. Move WordPress into your Live Services platform. That’s genius if you ask me.

        Now regarding acquisitions that were in the online space? They made several in the past couple of years. Sentilion, GreenField, BigPark, PowerSet. Even companies like Opalis, which not purely an online play, are about IT infrastructure for data centers.

        I must admit, I’m a little disappointed Frank. It’s easy to bash MS and say they are a non-player, but I think if you look outside the TechCrunch/AppleWorld bubble you’ll see that MS is still pretty influential, even in this online world. In fact, I’d argue that MS is on the upswing after a bit of a lull during the Vista years. I’d love to actually see reporters dig a little deeper than one chart for one year.