Nest And Google’s Top 10 Biggest Acquisitions
Google’s announcement that it is snapping up home automation firm Nest for a cool $3.2 billion in cash had us looking back at Google’s other big acquisitions. The internet giant has purchased nearly 150 companies — some for people, some for parts or both.
Here’s the countdown of Google’s 10 biggest acquisition deals so far, and a look at how the acquired companies have been brought into the Google fold.
10. AdMeld – $400 Million, June 2011
When Google bought AdMeld, the four year-old ad tech company already had relationships with big publishers including the Weather Channel, IDG TechNetwork and The New York Times Company. AdMeld is a sell side platform (SSP) designed to help publishers optimize web and mobile ad inventory. Google integrated many of AdMeld’s features into the DoubleClick Ad Exchange (AdX) to combine “the strengths of an SSP and an exchange into one platform”.
9. Wildfire – $450 Million, August 2011
When the news broke that Wildfire would be Google’s next big acquisition of 2011, reports put the deal at $250 million. An investor then verified with TechCrunch that the acquisition price was in fact $350 million plus another $100 million added to the pot in earn-outs and retention bonuses to ensure Wildfire’s 400-odd employees stuck around. That puts the total price tag for the social media marketing platform at $450 million. Google made the bid for Wildfire after reportedly losing out on its competitor Buddy Media to Salseforce.
8. Postini – $625 Million, July 2007
Postini’s enterprise-level software security and compliance solutions, which include message security, archiving, encryption, and policy enforcement solved the security piece for Google Apps. Then Google CEO, Eric Schmidt said of the deal, “With the addition of Postini, our apps are not just simple and appealing to users — they can also streamline the complex information security mandates within these organizations.” In 2013, Google transitioned Postini’s services to the Google Apps platform and Google Apps Vault, which includes Gmail, Calendar, Drive, Docs, Sheets and Slides.
7. ITA Software – $676 Million, July 2010
In a controversial move, Google announced it would buy travel reservations software company ITA, and let the world know it was bracing for a regulatory battle. As Greg Sterling wrote when the news broke, “ITA is behind the reservations systems for many major airlines around the world, as well as travel sites such as Kayak, Orbitz, Hotwire and many others. Bing Travel also relies on the software. Google, if allowed to complete the acquisition, would thus own the ‘infrastructure’ behind its direct competitor’s travel product.” Federal scrutiny did come, but in April 2011, the Justice Department OK’d the deal with conditions including the requirement to license ITA software to airfare websites on reasonable terms through 2016. Google Flights, which launched in September 2011, is powered by ITA technology.
6. AdMob – $750 Million, November 2009
It looked like Google would face an FTC fight when it moved to acquire mobile display ad network AdMob in April 2009. Just over a year later, the FTC opted not to block the deal, largely in reaction to Apple launching its own mobile ad network, iAd. Google got both the AdMob technology and talent with the deal. DoubleClick for Publishers is integrated with the AdMob Network. In June 2012, Google announced it had finalized the integration of AdMob’s mobile app inventory into AdWords. Google announced several more updates designed for app developers at the 2013 I/O Conference.
5. Waze – $1.3 Billion, June 2013
Rumors first started flying that Google would buy crowd-sourced (i.e. social) mapping and traffic app in January 2013. Google made the announcement official in June. Google avoided an anti-trust challenge by the FTC and moved ahead with product integrations after sealing the deal. In August 2013, Google added Waze traffic to Google Maps and search for Waze users. Then in November 2013, the Traffic with Waze card rolled into Google Now, and comedian Kevin Hart became the first celebrity Waze voice.
4. YouTube – $1.65 Billion, October 2006
At the time it announced it would be snapping up the less-than-two-year-old YouTube, Google had a market capitalization of $128 billion. Today Google’s market cap tops $375 billion. After struggling to make money for several years, YouTube is on a roll, reportedly taking in $5.6 billion in gross ad revenues in 2013, netting close to $2 billion. The video site is now at the heart of Google’s efforts to attract more brand dollars.
3. DoubleClick – $3.1 Billion, April 2007
Now demoted to Google’s third-largest acquisition, the DoubleClick deal put Google in the display advertising game, and turned out to be worth spending over 20 times its estimated revenues at the time. It’s amazing to think DoubleClick was already 11 years-old when Google beat out Microsoft in a bidding war for the ad software and network firm. Having launched in 1996, it’s two years older than Google itself. MySpace and America Online were listed among its customers at the time of the acquisition. Today, Google’s display ad network has generated over $3 billion in ad revenues in each of the last five consecutive quarters.
2. Nest – $3.2 Billion, January 2014
Drumroll please … the sizable Nest deal lands at number two on the list. Google’s bid for the smart thermostat and smoke detector maker comes less than two weeks after Re/Code reported that the startup was closing in on a $150 million round of funding, which would have put its value over the $2 billion mark. Google’s entry into the smart home raises even more consumer privacy concerns. In attempt to assuage fears, Google says Nest will continue to operate under current CEO Tony Faddell and as its own brand. Given its track record and the clear product synergies, though, it’s hard to take that promise at face value.
Over the past year, Andy Rubin’s stealth robotics group at Google picked up eight robotics companies, including the December acquisition of Boston Dynamics. The terms of those deals have not been disclosed. What role Nest will play here remains to be seen, but there are clear synergies in the areas of robotics and better machine learning, not to mention Google Glass, that they’re certainly thinking about.
1. Motorola Mobility – $12.5 Billion, August 2011
This was a doozy of a deal. Google bought Motorola Mobility for its patents and mobile hardware to boost the Android ecosystem. Motorola Mobility had already been running all of Google’s Android smartphones. Nest skeptics can at least look to Motorola as an example of Google keeping an acquisition as a separate entity (forced by regulatory concessions), if not for its economic performance. The patent portfolio Google placed much of its bet on hasn’t held its value, and the division continues to lose money. Google seems to be taking the long view, though; Motorola continues to roll-out new Android phones.
Other notable Google acquisitions that didn’t make the list include Zagat, the restaurant reviews site, was bought up for $150 million in September 2011 and is now incorporated into Google Maps and Google Places. The product feed management service, Channel Intelligence, now incorporated into Google Shopping, was acquired in February 2013 for $125 million.