Google will buy large and small companies across many of its business lines, including search, advertising, enterprise, and Web browsing and operating systems, Google CEO Eric Schmidt said during the search engine's third-quarter conference call. In a rare admission of Google's acquisition focuses, Schmidt opened the door for a lot of speculation in describing the types of purchases he and his corporate development team are eyeing. Schmidt also Google was looking to buy large companies where it makes sense.
Google is considering acquiring large and small companies in search, advertising, enterprise,
and Web browsing and operating systems, Google CEO Eric Schmidt said during
the search engine's third-quarter conference call Oct. 15.
In a rare admission of Google's acquisition focuses,
Schmidt opened the door for a lot of speculation in describing the types of
purchases he and his corporate development team are eyeing.
Specifically, he said Google is looking at search
companies with focuses on specific verticals, or that conduct analyses of how
search should perform. Google already offers Webanalytics to give Web site owners more insights into their Web site traffic and marketing.
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Vertical search engines include Kosmix, which lets users
drill deeper into the Web by topic, or any of a raft of real-time search players
indexing Twitter tweets and other socially-oriented info. These vendors include OneRiot, CrowdEye and Collecta.
Schmidt said Google has also looked at purchasing companies
that have figured out a better way of sorting and working on display ads, an
area where Google lags woefully behind Yahoo and AOL, despite major
improvements in monetizing YouTube with graphical ads. Google said 90 percent
of the top 50 AdAge advertisers have run campaigns with successful results on
YouTube, including HP, Palm and McDonalds.
"We have historically done an acquisition, perhaps,
one a month or so, and those are typically small, they're typically a complete
offering, they're typically technology-intensive," said Schmidt on the
call. "They're not very
expensive in the scheme of things, and they bring some specific
technology."
Companies Google target for acquisition also tend to
bring individual talent Google hopes to mine for their programming chops. Case
in point: Google in 2005 acquired Android, whose founder Andy Rubin went on to
become the director of engineering for Google's Android mobile operating
system.
Schmidt also Google was "certainly looking for
larger businesses to buy," but only where they accelerate revenue
growth or give Google a massive user base it wouldn't ordinarily have
access to.
"They're going to be quite infrequent," Schmidt admitted,
noting that Google's largest purchases -- YouTube and DoubleClick -- cost a lot
of money to buy and integrate.
Google has also looked at acquiring startups to bolster
its enterprise business, which includes the Google Apps software suite
and
Google Search Appliance. Google Apps includes Gmail, a wiki application
and word processing, spreadsheet and presentations programs.
However, visualization technologies from startups such as MindJet could make Google Apps a more compelling offering.
Finally, Google is also looking at startups that can help
improve Google's the functionality of the Chrome Web browser, which has about 3.2 percent market share, and forthcoming Chrome Operating System, expected to be the launching pad for
Chrome and Google Web services when it appears on netbooks in 2010.
Schmidt also noted that Chrome OS is on track to be
released for testing later this year, noting that after seeing internal demos
that it is superior to incumbent operating systems, including Microsoft Windows
and other Linux distributions, in "speed and efficiency."
Meanwhile, Google enjoyed fine earnings in the third
quarter, touting a third-quarter profit of $1.64 billion on earnings per share of $5.13,
a 27 percent boost from its profit of $1.29 billion on EPS of $4.06 in the
year-ago period.
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