Google’s Most Expensive Acquisitions

googleGoogle, one of the largest internet companies ever, has made more of the most expensive acquisitions in history than any other internet company. One of the first and most widely utilized acquisitions was the mobile platform, Android. The Android operating system is based on the Linux kernel with a direct manipulation user interface designed mostly for touchscreen mobile devices and tablets. Since 2011, Android has had the largest installed infrastructure of any mobile operating system. Its devices sell more than iOS, Mac OS, and Windows combined. The Google Play store currently has over 1 million Android apps circulating, and over 50 billion applications downloaded. A recent survey found that 71 percent of applications are developed for Android.

Google has backed Android financially since its inception. Android is popular with technology companies that prefer a low-cost, ready-made, and fully customizable operating system for high-tech equipment. The company was founded in Palo Alto, California in October 2003 by Rich Miner, Chris White, Nick Sears, and Andy Rubin. Their goal was to create smarter mobile devices that can interpret its user’s preferences and location. On August 17, 2005, Google acquired Android Inc. for $50 million. Key employees from Android stayed with the company after the purchase. Since then, Google has been rivaling Apple’s iPhones in the mobile market.

One of Google’s most expensive acquisitions was of the popular video-sharing website YouTube. The website was created by three former PayPal employees in February 2005.  The company is located in San Bruno, California. The site utilizes Adobe Flash Video and HTML 5 technology to display media content, mostly user-generated but also corporate sponsored. One of the founders of the website, Jawed Karim, cited that the inspiration for the website came when he had difficulty locating a clip of the Janet Jackson’s Super Bowl controversy. YouTube’s early headquarters were located above a Japanese restaurant and pizzeria in San Mateo, California. According to the company, 100 hours of new video content are uploaded to the site every minute. In October 2006, Google purchased YouTube for $1.65 billion. Since then, YouTube has made negotiations with NBC, Universal, and other entertainment studios to publish full-length movies and shows on the website.

The most expensive acquisition made by Google was for the ad service DoubleClick, which analysts have cited the reason for  as Google being founded and supported by the advertisements on their search engine. DoubleClick was founded as one of the earliest known ASPs (Application Service Provider) for internet ad-serving. It was created by Dwight Merriam and Kevin O’ Connor in 1995. Prior to its acquisition, DoubleClick merged with the Abacus Direct, a data collection agency. On April 13, 2007, Google announced that they will be purchasing DoubleClick for $3.1 billion cash. Upon the purchase, Google cut 300 jobs from DoubleClick due to redundancies. Since the purchase, DoubleClick has garnered many notable clients for its advertising services, including: General Motors, Microsoft, Coca-Cola, L’Oreal, Nike, Carlsberg, Apple Inc., Visa, and Palm. It was also one of the only companies that survived the bursting of the dot-com bubble, and is responsible for a significant amount of Google’s revenue.

By Andres Loubriel

The New York Times
Business Week

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