The talks between Microsoft and Yahoo this week have ratcheted up speculation about what Google might do to answer such a deal.
Should Google buy Apple, pairing its killer Web apps with a killer mobile device to battle Microhoo in the mobile ad market? Perhaps it could buy Adobe, as some analysts have speculated, to corral the market for rich Web applications.
At a market cap of $18.55 billion, Adobe would cost Google roughly what the company earned in online advertising in 2007 ($16 billion).
Such a move is more in keeping with Microsoft's nature, as evidenced by the $40 billion-plus Yahoo bid, than it is for Google, according to Gartner analyst Ray Valdes, who questioned Google's ability to think in such a calculating manner.
"I don't know that Google thinks of it in that way," Valdes said. "Maybe they are now because they've hired a lot of people who are traditional people. In the past, Google was more narcissistic. They had a viewpoint of they're just going to do what they want and just do cool stuff and they're not going to worry about competing, whereas Microsoft is the one that observes the competition and thinks in a calculated, some think Machiavellian manner."
Buying Adobe for almost $20 billion would be an extremely Machiavellian response, is his point. I agree, but as Valdes said, there are a bunch of seasoned execs at Google now and we all know CEO Eric Schmidt's fear and loathing of Microsoft.
If Google felt it needed to answer Microhoo, having failed to convince regulators that the merger would be bad for consumers, acquiring Adobe could be one approach.
Google buying Adobe would almost certainly squash Silverlight, and provide a pipeline through which Google could shuttle eye-popping Web apps.
Of course, just as Microsoft will soon be swimming in a sea of overlapping technologies when it buys Yahoo, Google would get a ton of desktop app packages it probably has no use for.