

In 2011 Google Spent $1.9 Billion Acquiring 79 Companies - profitbaron
http://www.flarevine.com/2012/01/27/in-2011-google-spent-1-9-billion-acquiring-79-companies/

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garethsprice
To save someone else a few seconds with a calculator, that's an average of
just over 24 million per acquisition. Not that each was acquired for an equal
amount.

~~~
CWIZO
What about Motorola Mobile that Google took over? Is that part of this $1.9
bilion?

~~~
profitbaron
The $1.9 Billion Google spent on acquistions excludes the Motorola deal. As
the Motorola deal is expected to close sometime in 2012, so their $12.5
Billion acquistion would be included in the 2012 numbers - of course this is
still up for regulatory approval.

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michaelochurch
Here's why acq-hiring is a disaster. Let's say FatFrog is the acquirer and
BuzzFly is the acquired.

BuzzFly's founders usually have earnouts ("golden handcuffs") and thus have an
incentive to stay, but merging them with FatFrog's executive hierarchy is
difficult and rocky. They tend to be resented, especially if there's an age
difference (i.e. the BuzzFly founders are 25 and FatFrog execs are 40+). The
executive merging is difficult in acq-hires because no one will take orders
from a 26-year-old whose IUsedThisToilet virtual bathroom graffiti app just
got bought for $87 million.

BuzzFly's top programmers, who are by this point the vitality of the
organization, don't have the huge amounts of stock that would be incentive to
stay. Their company also just got acquired so this is a _great_ time to go for
a major external promotion, especially since titles in a soon-to-be-eaten
company are pretty easy to self-upgrade. So the top engineers face the
"decision" between (a) use the transient "hotness" of their startup name to
get a huge promotion to a VP-level role in another company, or (b) become some
subordinate Software Engineer, Level 4.B.ii at FatFrog while watching their
original work (whatever remains of BuzzFly) goes into maintenance mode... and
has to be rewritten in C++.

The weakest engineers, who never could have gotten jobs at FatFrog, but were
able to get onto the BuzzFly train when Buzz was desperate, stay along.

So the actual result of an acq-hire is that the execs are rejected like a bad
transplant, the best engineers bolt, and the worst ones stay on board.

~~~
badclient
Here's why your post is a disaster in terms of faulty assumptions.

* Most acquired founders aren't made _execs_. Most end up as Product Managers or team leaders.

* The weak engineers from acquired companies can't sneak into google. They must go through the typical Google interview process.

 _use the transient "hotness" of their startup name to get a huge promotion to
a VP-level role in another company_

* ^ Sorry but this is just unheard of. Getting VP-level role at top companies is very hard and if a developer of an acquired company could score a VP-level role elsewhere after the acquisition, he could probably do so before the acquisition. It's got little to do with acquisition. The guy must just be good.

 _no one will take orders from a 26-year-old whose IUsedThisToilet_

* ^ You are using the most extreme _stereotype_ of what is acquired. Now, I understand that your example of IUsedThisToilet wasn't mean to be taken literally but I question why you'd make up a name than use one of many examples from an actual acquisition. Of course, making up a name like IUsedThisToilet helps you with your argument. Only it is not rooted in reality.

~~~
patio11
_Getting VP-level role at top companies is very hard and if a developer of an
acquired company could score a VP-level role elsewhere after the acquisition,
he could probably do so before the acquisition_

The scenario is not "I was engineer #3 at a startup which was just acquired by
Google. I'll take a corner office at Facebook now, please." It is "I was
engineer #3 at a startup which was just acquired by Google. Hello, Mr. VC.
Sure, I'll join that company you just funded as VP of Engineering."

This second one, ahem, does not strike me as supremely implausible.

~~~
badclient
Even in that case, I am not aware of many instances where a developer being
part of an acquisition helped him _significantly_ in acquiring a VP position
at a start-up.

Any start-up worth their salt is very deliberate in hiring. Now, if you don't
care about where you are working and are merely chasing titles, I'd argue you
can get a VP position without needing to be part of an acquisition.

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vannevar
And yet that $1.9B is only a fraction of Google's cash reserves. And Apple's
is nearly $100B. Corporations are hoarding cash at record levels. As of last
January, the top 17 US corporate cash reserves amounted to nearly half a
_trillion_ dollars. It's not unreasonable to speculate that corporate hoarding
is contributing to our flat economy, when you consider how that cash would be
multiplied if it were turned loose. Companies are holding onto cash because
they're afraid of slow growth because of high unemployment, which becomes a
self-fulfilling prophecy when they don't invest in new business and hire more
people.

It also casts doubt on claims that raising corporate taxes will hurt the
economy. If companies aren't spending any of the cash they already have, how
will giving them more to stuff under the mattress help?

~~~
shingen
That headline meme sounds impressive: corporations hoarding cash.

Until you dig deeper and find out that US corporations are accumulating debt
at the fastest pace in world history. Their cash is required to continue to
offset the massive debt being acquired. If interest rates go up at all in the
next ten years, bankruptcies will skyrocket. A lot of companies are being
irresponsible with debt right now because they can issue it at hyper low
rates.

~~~
vannevar
Is there a good source for historical data on this? The best I could find goes
back to 1996, and while the amounts issued in 2006-2010 are high, they don't
show the steep hockey-stick climb that we saw in the mortgage crisis, for
instance.

[http://webcache.googleusercontent.com/search?q=cache:ksi3L1y...](http://webcache.googleusercontent.com/search?q=cache:ksi3L1yHTK8J:www.sifma.org/uploadedfiles/research/statistics/statisticsfiles/corporate-
us-corporate-issuance-
sifma.xls+US+corporate+debt&cd=11&hl=en&ct=clnk&gl=us&client=firefox-a)

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fpgeek
And that's only counting the acquisitions that closed...

~~~
freehunter
Well obviously. You could say the same thing year over year. If we were
counting the ones that were started and not yet completed, it would just
subtract from the amount of the next year.

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SquareWheel
I don't think this will continue into 2012, with the way Larry is focusing on
the core products.

~~~
profitbaron
It will continue in 2012 as in the filing Google said, _“Acquisitions will
also remain an important component of our strategy and use of capital, and we
expect our current pace of acquisitions to continue."_

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mace
It also spent spent $9.7 million on lobbying in 2011 (<http://wapo.st/yanxMo>)
The powerful is getting even more powerful. Next stop 'too big to fail'.

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ThaddeusQuay2
2011 was the year that Google gobbled up drop.io, and buried it deep in the
room known as "Stuff We'll Never Use, And Neither Will Anyone Else".

NOTE TO SELF: Startup Idea: Create a new drop.io, and combine it with some of
the features of MegaUpload. Call it MegaDrop.

~~~
samwillis
Facebook brought drop.io in October 2010

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ThaddeusQuay2
Thanks for the correction. I had this nagging feeling that it might have been
2010, as I tend to lose track of time, and I could have sworn that drop.io's
announcement said "Google". Anyway, we could use another drop.io, for people
who don't want to be tied to Google's ecosystem.

~~~
samwillis
A new drop.io would be awesome, it was a very good product and I haven't found
anything else like it yet. Has anyone found anything similar?

~~~
ThaddeusQuay2
What were the main features that you liked about it, but haven't found
elsewhere? I liked being able to email files directly to the drop. I suggest
that we make a short list of awesome features, and maybe someone will take up
the cause.

