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Google's M&A Mayhem

As of late, Google Inc (GOOG) has been pretty active in regards to new Mergers and Acquisitions. One might think they are blowing a lot of cash from their books, but recently reports have shown that in the first quarter of fiscal 2013 Google's gross revenue reached an all-time record of $14.4 billion. This is supported by yearly increases of 2.3% and 36.2%. Google has acquired a number of companies to help improve their Google Search, E-commerce, and cloud platform.

2013 Acquisitions

Date

Company

Business

Country

Price

Integration

Feb-13

Channel Intelligence

Product Ecommerce

USA

$125M

Google Shopping

Mar-13

DNNresearch Inc.

Deep Neural Networks

Canada

--

Google, X Lab

Mar-13

Web App. Server Talaria

Cloud Computing

USA

--

Google Cloud Platform

Apr-13

Behavio

Social Prediction

USA

--

Google Now

Apr-13

Wavii

Natural Language Processing

USA

$30M

Google Knowledge Graph

May-13

Makani Power

Airborne Wind Turbines

USA

Google X

June-13

Waze

GPS Navigation Software

ISR

$1.3B

Google Maps

Acquisitions for Google E-Commerce:

In February, 2013 Google acquired Channel Intelligence for about $125 million. Channel Intelligence will help maximize sales and Return on Ad Spend (ROAS) by using Product Listing Ads (PLAs). Channel Intelligence operates in over 31 countries and does business with over 850 retailers. They acquired this company with hopes to compete with e-commerce guru's Amazon Inc (AMZN) and EBay Inc (EBAY). This will provide Google users with a shopping experience they did not have before. This will save the consumer time by staying within the Google platform.

Acquisitions for Google Search:

About a month ago Google joined forces with Behavio in order to enhance Google Now. Google Now is a personal intelligent personal assistant developed by Google that is available on Google Search for the Android and iOS operating systems. It uses an interface that is able to answer questions, make recommendations, and perform requests. Google Now hopes to use Behavio to turn phones into smart sensors to that are able to collect the data cell phones capture throughout the day. Behavio has the ability to analyze trends and behavior changes, which helps understand changes in individuals and communities. Look at this as something that will think for you. Behavio's software gives Google the information and allows them to show it to you before you can ask for it.

In addition to acquiring Behavio, Google acquired Wavii to help strengthen their Knowledge Graph division. Wavii is a natural language processing start-up. This is an application both Apple and Google were competing for; however, Google eventually won.

The acquisition for DNNresearch is another step to enhancing the developing Google Xlab. DNNresearch does research on "deep neural networks". The Canadian start-up was acquired to improve Google's image and voice search. With image and voice queries becoming more common, enhancing its abilities will make Google's search even stronger.

Acquisitions for Google Maps:

Recently, Google acquired mapping software provider, Waze. This move was made to enhance the capabilities of Google Maps by improving directions and display traffic. Google paid a premium for this company, but for a good cause. This is a company that both Facebook (FB) and Apple (AAPL) were competing for; therefore, keeping it out of the hand of these two tech giants was a great move.

Acquisitions for Cloud Platform:

Google has recently acquired a company Taralia to help improve their cloud platform. Talaria has been developing a rare technology that will enhance the way people build and run their website. This is a phenomenal move for the Google Cloud Platform Team. This company has the ability to run optimized bytecodes, which is a technology that helps Google's servers run more efficiently. In addition to enhancing the server, Talaria designed a built-in profiler and source-code that analyzes code to point out bottlenecks or mistakes.

Conclusion:

Over the last year or so, Google has been building an empire. According to the company's 10-Q, Google spent a measly 0.5 percent of its $50.1 billion in cash during Q1. Outside of $1.3 Billion spent on Waze, Google spent a total of $291 Million on acquisitions in Q1. Out of the $291 Million, $150 million went to patents and other technologies, $133 million on goodwill, $24 million on customer relationships, and $16 million on net liabilities. What started out as a simple internet search company grew to the largest search engine in the world. By purchasing these companies and building the acquisitions into their bigger plans, Google will have more depth and knowledge throughout the tech industry; therefore, increasing their expertise in engineering, functionality, technology and product offerings. Google remains the company that has no ceiling.

Source: Google M&A Mayhem