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Ranking the success of Google's aquisitions

Virginia residents are likely aware that Google is one of the leading lights of the information age. The Mountain View company has grown from humble beginnings to become a leader in the technology sector, and acquisitions have played no small part in this growth. Google has acquired 145 companies in the decade since its initial public offering, and some of these moves have paid off handsomely.

Perhaps the most successful of Google acquisitions has been YouTube, which was purchased for $1.65 billion in 2006. The figure raised eyebrows at the time, but YouTube now generates over $5 billion in revenue each year. Acquiring Android in 2005 was another savvy move for the technology giant. Analysts predict that the operating system will power about 80 percent of the smartphones sold in 2014, which allows Google to extend the reach of their search based advertising. Another prudent move by Google was the purchase of DoubleClick in 2007, which allowed the company to expand into display advertising.

However, not all of Google's acquisitions have been as lucrative. The social application developer Slide was shut down by Google two years after a $182 million acquisition, and Motorola was sold for $3 billion two years after being purchased for $12 billion. While the latter acquisition may seem to be a major misstep, analysts are quick to point out that the mobile patents Google acquired along with Motorola offer substantial legal protection for Android.

Google's track record shows that there is always an element of risk associated with mergers and acquisitions. Entrepreneurs are optimistic by nature, and sometimes the potential benefits of a deal may lead to possible negative aspects being overlooked. An attorney with experience in this area may be able to offer advice and counsel to help clients assess an acquisition more thoroughly so as to avoid such pitfalls.

Source: NBR, "Google’s best and worst acquisitions", Josh Lipton, August 19, 2014

Source: NBR, "Google’s best and worst acquisitions", Josh Lipton, August 19, 2014

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