facebook-page-view
Advertisement

Google CEO Sees One Small Acquisition A Month

By Reuters

  • 24 Sep 2009

Google Inc expects to buy one small company a month as it rekindles its acquisition engine and moves beyond the worst phase of the global recession, Chief Executive Eric Schmidt said in an interview on Wednesday.

The Web search giant has historically maintained a steady pace of acquiring small, privately held companies, but its deal machine took a breather earlier this year when Schmidt said that prices were too high for his liking.

"Acquisitions are turned on again at Google and we are doing our normal maneuvers, which is small companies," Schmidt told Reuters Television, before delivering a speech on green technology on the fringes of the G20 summit in Pittsburgh.

Advertisement

"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."

In August, Google announced the purchase of video software maker On2 Technologies for $106.5 million -- its first acquisition of a public company.

In the interview, which covered a wide range of subjects from new business initiatives to the various regulatory issues facing the company, Schmidt also reiterated his view that the worst of the global recession is over, seeing improvement both inside and outside the United States.

Advertisement

"It's clear that the worst is behind us," he said. "What we see at Google is some level of improvement and what is more important is we see it not just in the United States but outside the United States."

Google, the world's No. 1 Web search company, has seen revenue growth slow during the recession, although its paid search advertising business has held up better than other forms of advertising-based online businesses.

With nearly $22 billion in revenue last year, Google's large size makes it tough to grow at the 40 percent clip it once did. "I always worry about growth," Schmidt said. "Whenever you are a big company -- Google now is a sizable company -- where does the growth come from?"

Advertisement

Last week, Google stepped up its efforts to challenge Yahoo Inc in the display advertising market with the introduction of its new DoubleClick ad exchange.

Schmidt said the exchange "could be a very significant part of our revenue over some number of years because ad exchanges, when they are running, grow very, very quickly."

SHARES AT YEAR HIGH

Advertisement

Google's stock set a new 52-week high of $507.00 on Nasdaq before falling with the broader market to close down 0.12 percent at $498.46.

The Mountain View, California-based company generates 97 percent of its revenue from advertising. But it is pushing into new markets with products like the Android mobile software and Chrome operating system for PCs.

Some of Google's expansion plans, including a project to scan books and create a massive online digital library, have raised the attention of government regulators.

Advertisement

Schmidt said recent criticisms by the U.S. Justice Department about the plan "seemed quite reasonable." If there are a "few minor changes" to be made to Google's settlement with groups representing authors and publishers, he said, "that's a pretty good thing to do."

"I don't think we will make significant changes to the deal," he said.

Google continues to refine the technology and money-making features that power its core Internet search business, even as some Web publishers consider charging subscription fees for their content -- a development that could potentially prevent Google's search engine from accessing certain Web pages.

"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.

But, he added that he believed the majority of content on the Web will remain free and advertising-supported.

"We will end up with a hybrid," the CEO said.

Share article on

Advertisement
Advertisement