google-acquisitions

Google Acquisitions

With 48 acquisitions in 2010 and 57 in 2011, Google was acquiring companies at a rate of around one per week over this two-year period around a decade ago.

While that impressive rate has no doubt slowed in recent times, the total number of Google acquisitions has surpassed 250 with many of those vast companies in their own right.

Who are some of the notable Google acquisitions? Let’s have a look below.

Motorola Mobility

Google acquired Motorola Mobility in 2011 for $12.5 billion and the purchase remains its largest today.

The move was seen primarily as a way for Google to enhance the Android ecosystem and, according to CEO Larry Page, because Motorola was considered a “market leader in the home devices and video solutions business.”

Post-acquisition, Google continued to run the company as a separate business and gained access to Motorola’s vast portfolio of 14,600 patents and 6,700 patents pending.

It then sold the company for a loss to Chinese multinational tech company Lenovo in 2014.

Nest Labs

In January 2014, Google announced a $3.2 billion cash purchase of thermostat and smoke-alarm manufacturer Nest Labs.

While some were initially puzzled as to the motivation behind the deal, others saw it as a way for Google to enter the homes of its users and use Nest’s technology in its own devices.

As part of the acquisition, Google welcomed entrepreneur Tony Fadell, an ex-Apple employee who designed its famous iPod music player, and a host of other talented designers and engineers.

YouTube

Google acquired YouTube in 2006 for the sum of $1.65 billion which was considered exorbitant at the time.

Today, however, the video platform is estimated to be worth around $180 billion and contributes around 11% of total company revenue.

In fact, if YouTube was a standalone listed company, it would be worth more than Netflix, Twitter, Spotify, and Snapchat combined and be second only to Disney.

Mandiant

Cybersecurity firm Mandiant is a more recent Google acquisition having only been completed in March 2022 for $5.4 billion. At the time of writing, Mandiant is Google’s second-largest acquisition.

Mandiant joined Google’s cloud computing division primarily to enable the company to enhance its security operations suite and advisory services.

This would enable Google to better address customer security concerns and compete with the likes of Azure and AWS.

Looker

Google acquired data analytics startup Looker for $2.6 billion in 2020. Like the Mandiant purchase, Looker became absorbed into the Google Cloud platform where it would be used to support vendors utilizing a multi-cloud strategy.

For Looker CEO Frank Bien, the benefits of Google’s involvement were immediately obvious: “Joining Google Cloud provides us better reach, strengthens our resources, and brings together some of the best minds in both analytics and cloud infrastructure to build an exciting path forward for our customers and partners.”

Fitbit

Google completed the purchase of wearable fitness tech company Fitbit in January 2021 after first announcing it in November of 2019.

The deal, worth around $2.1 billion, took some time to be finalized by the European Commission over concerns that it may have violated antitrust and data privacy laws.

Google made several concessions to ensure the takeover was successful. Chief among which was a promise not to incorporate any GPS or health data into its targeted advertising.

Anthropic

With the launch of ChatGPT in November 2022, the AI market has moved at an exponential rate. ChatGPT, developed by OpenAI, which sealed a partnership with Microsoft, put a substantial amount of pressure on Google.

Indeed, Google invested $300 million in Antrhopic, an AI research lab founded by a former OpenAI member who focused on building AI conversational interfaces with built-in safety. Thus, Google is leveraging Anthropic’s technology to launch its own AI conversational tool.

Key takeaways:

  • Google is not acquiring companies at the rate at which it did in 2010 and 2011, but it nevertheless has made over 250 acquisitions to date.
  • Google’s largest acquisition was Motorola Mobility for $12.5 billion, a company that was on-sold to Lenovo two years later. Google’s purchase of YouTube is likely its most profitable so far.
  • Other more recent acquisitions include Looker, Fitbit, Mandiant, and Nest Labs.

Read Next: Google Business Model, How Does Google Make Money

Related To Google

Google Business Model

google-business-model
Google is an attention merchant that – in 2022 – generated over $224 billion (almost 80% of revenues) from ads (Google Search, YouTube Ads, and Network sites), followed by Google Play, Pixel phones, YouTube Premium (a $29 billion segment), and Google Cloud ($26.2 billion).

Google Other Bets

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Of Google’s (Alphabet) over $282 billion revenue for 2022, Google also generated over a billion dollars from a group of startup bets, which Google considers potential moonshots (companies that might open up new industries). Those Google’s bets also generated a loss for the company of over $6 billion in the same year. In short, Google is using the money generated by search and betting it on other innovative industries. Of Google’s (Alphabet) over $282 billion revenue for 2022, Google also generated over a billion dollars from a group of startup bets, which Google considers potential moonshots (companies that might open up new industries). Those Google’s bets also generated a loss for the company of over $6 billion in the same year. In short, Google is using the money generated by search and betting it on other innovative industries. 

Google Cloud Business

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How Big Is Google?

how-big-is-google
Google is an attention merchant that – in 2022 – generated $224 billion (almost 80% of its total revenues) from ads (Google Search, YouTube Ads, and Network sites), followed by Google Play, Pixel phones, YouTube Premium (a $29 billion segment), and Google Cloud ($26.3 billion).

Google Traffic Acquisition Costs

traffic-acquisition-cost
The traffic acquisition cost represents the expenses incurred by an internet company, like Google, to gain qualified traffic – on its pages – for monetization. Over the years, Google has been able to reduce its traffic acquisition costs and, in any case, to keep it stable. In 2022 Google spent 21.75% of its total advertising revenues (over $48 billion) to guarantee its traffic on several desktop and mobile devices across the web.

How Does Google Make Money

google-revenue-breakdown
Alphabet generated over $282B from Google search and others, $32.78 billion from the Network members (Adsense and AdMob), $29.2 billion from YouTube Ads, $26.28B from the Cloud, and $29 billion from other sources (Google Play, Hardware devices, and other services).

Google Organizational Structure

google-organizational-structure
Google (Alphabet) has a cross-functional (team-based) organizational structure known as a matrix structure with some degree of flatness. Over the years, as the company scaled and it became a tech giant, its organizational structure is morphing more into a centralized organization.

YouTube Business Model

how-does-youtube-make-money
YouTube was acquired for almost $1.7 billion in 2006 by Google. It makes money through advertising and subscription revenues. YouTube advertising network is part of Google Ads, and it reported more than $29B in revenues by 2022. YouTube also makes money with its paid memberships and premium content.

Attention Merchants

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