Editor’s note: This article was first published in April 2010. Google stopped developing Google Wave later in 2010, Google Video was closed and Picasa was retired in 2016, so its statements about these products reflect 2010, as do the market capitalization over $130 billion, the advertising revenue and the roughly 100 million daily YouTube visits.
Google, the internet giant. The master of acquisitions. The company that will change the world. Google is an example of smart purchases and well-placed bets.
For about the last seven years, it has taken stakes in thousands of companies and joined several projects through venture capital firms. But even if we limit the list to acquisitions, they are hugely significant, both for their size and for how well chosen they were.
In 2003, Google reached an agreement to acquire Pyra Labs, the company that created Blogger, a blogging platform that Google has made available, along with its tools, to every internet user free of charge.
In June 2004, Google made a very significant purchase of shares in Baidu, China’s largest search engine. For two years Google exploited this market and created many business opportunities for internet companies. However, because of political problems, Google sold its stake in June 2006.
In July 2004, Google bought Picasa, image editing and organizing software that it now offers for free.
In October of that same year it also acquired Keyhole, a company specializing in maps and satellite imagery, which it turned into Google Maps and Google Earth.
In 2006, Google also bought Writely, an online word processor, with the idea of developing more programs. It was looking ahead to the day when internet users would no longer need the essential programs installed on their own computers and could access their documents from anywhere in the world.
That day has come: it is now possible with Google Wave.
Google had only one competitor, in only one product: YouTube versus Google Video. That was when Google showed its negotiating skill and commercial aggressiveness. In a few years, its technique for outselling the competition will be written up in textbooks.
The Google technique: if you can’t beat your competition, buy it. Google bought YouTube for $1.648 billion (€1.3 billion).
That is one way to get around 100 million visits a day to a single service. Google’s secret is to offer a whole world of free services and fund them with advertising, which brought in $8.342 billion in its last financial year.
Today Google has a market capitalization of more than $130 billion. Google is indeed heading for the cloud.
Featured image: Austin McKinley, CC BY 3.0, via Wikimedia Commons.
