What to Expect from Google over the Next Year

Whenever you listen to Google (GOOG) CEO Eric Schmidt, you have to either;

a) pay attention to what he doesn’t say, or

b) read between the lines of what he does say.

Let’s break down a couple of interesting statements the search chief told Reuters.

First up, what are Google’s plans for future acquisitions?

“My estimate would be one-a-month acquisitions and these are largely in lieu of hiring,” he said. “There may be larger acquisitions, but they really are unpredictable.”

Translation?

You can bet we’ll hear about an acquisition in the $100 million range–similar to this one–very soon. In addition, you can bank on Google being in talks to buy a company with a price tag in excess of $1 billion. When he says there “may” be larger acquisitions, but they are “unpredictable” it basically means that Google is in advanced talks and just needs to agree on terms. He can’t just come out and say, “yeah we’re in the process of doing a huge deal,” because if it failed to materialize, Wall Street would start panicking that the company had lost its mojo.

OK, let’s turn to another interesting statement from Schmidt. This time regarding paid subscriptions for publishers:

“We are clearly going to see paid content models emerge, perhaps Google will be one of the companies that offers subscription services, we have thought about it some,” Schmidt said.

Translation?

Guaranteed! In fact, I wouldn’t be at all surprised if Google is already testing a model that allows publishers to charge access for their content, with Google handling the entire process. Heck, many publishers are already content to hand over the keys to Google, so they’d be delighted if it can figure out how to get readers to pay a subscription.

So, to recap. Expect the announcement of a major acquisition by the end of the year and a new subscription revenue model by the end of next year.

Comments

[User 491532:]

FYI, the ON2 acquisition is not in the bag. It still needs ON2 shareholder approval and most are negative about the offering price. Plus several shareholder lawsuits and maybe a Proxy fight.

A followup story about this attempted take over that's NOT on track to close in the 4th QTR would be invited.

thanks
James

Sep 25 07:31 AM

[Tom B:]

I'm not convinced On2 was worth 100 million. Unless VP7 has a compelling and DURABLE advantage over h.264, On2's a depreciating asset.

Google's overstretching. Delusions of grandeur. They should stick to search. ChromeOS is not going to take over the world or anything. Android will do moderately well, but it can't beat the iPhone.

Long GOOG.

Sep 26 10:09 PM

[Moise Levi:]

Like most big caps, I expect Google's growth to slow down.
It will probably be considered as a Media ETF ; meaning, owning Google will give you full exposure to media related stocks

Sep 27 09:46 AM