Google spent over $1.9 billion in 2011 to acquire 79 companies, including ITA Software, Admeld and Zagat. The deals help Google compete versus Facebook, Microsoft and other rivals.
Google (NASDAQ:GOOG) shelled out $1.97
billion in cash and stock for a record 79 acquisitions in 2011, the biggest of
which was the company's $676 million purchase of ITA Software.
The search engine leader, which disclosed the numbers in its 10-K filing with the Securities
and Exchange Commission, agreed to purchase travel software maker ITA in July
The deal was hung up by regulatory
scrutiny at the hands of the U.S. Justice Department, which was concerned
Google would gain too much power and influence over the travel search niche.
Kayak, Expedia, Microsoft and several other travel search providers protested
the acquisition, but the DOJ ultimately cleared the deal in April 2011.
acquired ad market specialist Admeld
million, another deal that was held up slightly under regulatory scrutiny; $151
million for restaurant review guide maker Zagat; and $114 million for daily
deals asset Daily Deals.
The company's acquisition numbers were
up considerably from 2010, when Google shelled out about $1 billion for 48
companies. In fact, Google acquired more companies through its third quarter 2011-57
in all of 2010.
takeaway from this is that Google is not shy about ponying up cash for assets
that fill in holes in its core search, advertising, mobile, video and commerce
business units. The idea is to pay to compete versus Facebook, Microsoft Bing
and other competitive threats online.
"These acquisitions generally
enhance the breadth and depth of our expertise in engineering and other
functional areas, our technologies, and our product offerings," Google
noted in its SEC filing. "Acquisitions will also remain an important
component of our strategy and use of capital, and we expect our current pace of
acquisitions to continue."
Most of Google's 2011 acquisitions were
targeted at boosting its local business and commerce search efforts. Zagat will
be used in Google Places for local business search.
Daily Deals, along with loyalty card
provider Punchd, coupon provider Zave Networks and daily deals aggregator
DealMap, will likely be used to fortify the Google Offers deals and Google
Wallet mobile payment services.
Google's YouTube arm bought video
producer Next New Networks, which is being used to help fashion new channels on
YouTube, as well as Fflick for social sentiment analysis and Green Parrot
Pictures for video processing.
Google could have actually spent closer
to $15 billion in acquisitions last year if its $12.5 billion bid for Motorola Mobility (NYSE:MMI) was consummated
DOJ and European Commission are scrutinizing the merger, which Google announced
last August. Google expects the deal to close early this year.