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Monday, October 1, 2007

Google roadmap seen in its acquisitions

Looking at Google's acquisitions to see how the company developed, I thought perhaps we could discern a roadmap of where Google might be going next. First, I was surprised to see how many deals Google has done over the years. I was also struck by how the company has focused very precisely on expanding and filling in certain lines of business within the company. Google's acquisition binge has actually been quite strategic and extremely successful.

We see that most acquisitions fall into a well-defined set of groups. Initially those groups were search, advertising, maps and a general Internet/Social Networks/Blogging category. More recently, they have added mobile, enterprise and security acquisitions while continuing to build the other categories.

Let's take a look at the categories, the companies acquired and when the deal took place. Where I can, I'll add a few comments.

Internet/Social Networking/Blogging --

Deja News (February 2001) This web-based Usenet archive started life in 1995. Google bought the Usenet archives and reintroduced them as Google Groups. Today, Google Groups features Deja's Usenet, mailing lists, and Yahoo! Groups-esque features with a Gmail-like interface.

Blogger - (February 2003) Blogger was the flagship product of Pyra Labs. In an effort to become profitable, Pyra introduced the ad-powered Blogspot hosting and the pay Blogger Pro service. It wasn't quite enough, and Pyra needed more resources, so Google stepped in during 2003. Blogger was redesigned by professional web designers in May 2004, and is now one of the most-used blogging tools with AdSense as a built-in widget.

Picasa - (July 2004), software management of photographs online. Picasa, a $30 photo organizer program, was first released in October 2001. In May 2004, Picasa announced integration with the Google-owned Blogger, and in July 2004, Google bought the company. Soon, Picasa was free, and it featured Google trademarks like an "I'm Feeling Lucky" button. The software routinely wins awards from leading PC publications.

Urchin - (March 2005) web analytics and statistics. Used by my site and many others.

Feedburner - (June 2007) RSS management company formed in 2003, acquired in 2007 for around $100 million.

YouTube - (October 2006) bought for $1.65 billion, video-sharing site YouTube remains an independent site, a sub-brand, if you will. Google is working to further monetize the site and develop new ways of advertising within or around video.

Panoramio - (June 2007) A Spanish photo tagging and photo sharing site, Panoramio's service allows people to geo-tag the exact location where images were taken.

Summary --
Google has done a nice job of stitching these properties together. Look at how Blogger, Feedburner, Picaso and AdSense are all integrated together. And Panoramio and Google Maps.

Search --

Outride - (September 2001), Outride, Inc. was an information retrieval spin-off from Xerox Palo Alto Research Center (PARC). Google acquired certain technology assets in September 2001 and quickly integrated them into its search engine.

Kaltix - (September 2003), This 3-person personalized search startup company became the foundation of Google Personalized Search.

Transformic - (September 2006) Tranformic was a small company, focused on building search engines for the deep web where major commercial search engines had difficulties crawling.

Summary -- Google was not too proud to acquire technology it didn't already have. In their quest to become the search leader, there was willingness to augment internal development with astute acquisitions from the earliest days.

Advertising --

Applied Semantics - (April 2003) Google bought this contextual advertising company and used it to help develop its AdSense/AdWords services, allowing it to compete with Yahoo!'s Overture.

Sprinks - (October 2003) paid advertising

dMarc Broadcasting - (March 2006) Google paid $1.14 billion for dMarc Broadcasting's radio advertising infrastructure. dMarc connects advertisers and agencies directly to radio stations with an advertising platform that automates everything from sales to scheduling, delivery and reports.

Adscape Media ( February 2007) In existence under the name BiDamic since 2002, and as Adscape Media since 2006, this in-game advertising company offers dynamic delivery of advertising with plot and storyline integration.

DoubleClick - (April 2007) This deal, for a reported $3.1 billion, is Google's largest. This acquisition gives Google access to DoubleClick's advertising software and their relative position with Web publishers and ad constituents. The deal positions Google to expand their business in the banner ad realm. The clients may be a big benefit of this acquisition.

Summary - Google has added to advertising capabilities as needed and has built a juggernaut. Now that the contextual and search advertising sectors are dominated by Google, they are working on developing leadership in display advertising via the DoubleClick purchase. Radio, newspapers and cell phones are next on the agenda.

Mapping --

Keyhole - (October 2004), imagery by satellite. Keyhole is a digital mapping company founded in 2001. Since the buyout, there has been an immediate price reduction for the Keyhole software and integrated satellite photos in Google Maps.

Zipdash - (December 2004) Provides navigation assistance for road traffic on mobile in real time by GPS. Now part of Google Maps.

Where2 - (October 2004) Internet mapping.

Summary - Google wasn't first to mapping but they have become practically the standard against which others are measured. These acquisitions helped along the way.

Enterprise --

Upstartle (March 2006) - Their excellent Web-based word processor, Writely, is now part of Google Apps. It's no secret Google is planning to go after Microsoft's traditional office productivity product lines.

Postini - (May 2007) Google bought messaging security company Postini for $625 million. Google Apps customers will be able to use Postini services for tasks like scanning and encrypting e-mail, and archiving messages for compliance and legal purposes. The acquisition will take Google a step deeper into the enterprise IT market and increase its rivalry with Microsoft.

JotSpot - (October 2006) A wiki creation site with a number of collaborative tools for business users, and includes applications such as spreadsheets, calendars, and forms.

Zenter (June 2007) This company developed some online presentation tools which it appears became the beta presentation software recently announced by Google as part of the Google Apps suite and an alternative to PowerPoint.

Tonic Systems (April 2007) Company makes software that can extract information from presentation software such as Microsoft's Powerpoint. The information can then be saved in an HTML page or PDF.

Summary - With Google Apps, Google wants to challenge Microsoft in business productivity software. They have essentially bought the ability to compete against Microsoft Word and PowerPoint. Now, via the Postini acquisition, they are adding security features, a must have for most corporations. Another example of building out a full-featured solution.

Security --

GreenBorder - (May 2007) - makes a sandbox for internet applications to run within, protecting the operating system of a computer from potentially malicious software. The user knows he's protected because a "green border" appears around the Web browser. Google could incorporate GreenBorder's technology to scan sites before allowing search engine users access (or at least warn them of the security risk). Google could also integrate GreenBorder in the Google Web browser toolbar, giving users an easy to use tool that provides a certain degree of insulation from malicious Web sites. Either way, Google enhances its value proposition to its paying customers and makes it increasingly more attractive to users than rivals, such as Microsoft and Yahoo.

Postini - see Enterprise category above

Summary - Google prides itself on being a good Internet citizen. Look for more acquisitions in this space. Google has only scratched the surface with the GreenBorder and Postini acquisitions but they are doing a nice job of integrating Postini with Google Apps. Will they buy a smaller anti-virus company like Panda to round out their offerings? Time will tell but the move would make sense.

Mobile --

Dodgeball - (May 2005) Google acquired this two-person cell phone social networking company but so far, nothing much has happened with it. It will probably have something to do with Google Mobile.

Android (August 2005), software for mobile telephones. Said to be developing the operating system for the yet-to-be-introduced gPhone.

Reqwireless (July, 2006) Maker of popular mobile applications for email
and the web on wireless devices.

Grand Central - July 2007, GrandCentral lets users of its software combine all their phone numbers and voicemail boxes under one phone number so they can manage various phone features online. Users can set up their accounts so that the number can ring on one or multiple phones based on who is calling. Customers can hear voicemail online or from a phone and forward voicemails to others or post them to a blog. The
acquisition adds to other Google communications services, including Google Talk, an instant messaging service that includes VoIP calling.

Zingku - acquired September, 2007 - another mobile social network. Allows users to store & fetch mobile photos and txt reminders with alarms on your companion mobile web site, share mobile photos and posts with friends and friends-of-friends with txt msg'ing, instant messenger and web. Assemble a crowd with txt messaging, IM and email. Take an instant poll among friends, all with txt messaging.

Summary - acquisitions have not quite spelled out the direction Google is taking in the mobile space, still they have dropped enough hints and leaked enough secrets that the blogosphere has started an endless cycle of speculation.

Conclusion --

Without really casting themselves as a portal (like Yahoo), Google has built and integrated a powerful and popular set of applications in the general Internet/Social Networking/Blogging space.

Similarly, Google has made good progress in the Enterprise space, assembling productivity and security tools. Acceptance is not yet huge but the company has what is needed to provide companies a useful feature set and it is expected that Google Apps will eventually grow into another profit center.

Search, Advertising and Maps are all mature and profitable areas for Google.

In the Mobile space, however, things are a little different. It appears that much of the work in this area has been done in secrecy, most likely with the technologists that came to Google in the Android acquisition. Google has been acquiring social networks that work on cell phones. This leads me to believe that they have figured out the basics of what they need to be successful in the mobile arena -- hardware, phone OS, search, advertising (Google recently announced that they have mobile ads available as part of the AdWords network) -- and the addition of the social networks is the last piece needed to roll out a full-featured mobile solution.

It seems that Google is more than the sum of its parts. Not only are they willing to buy companies as needed, they have been very effective at integrating the acquisitions into Google's major lines of business. The mobile sector seems to be a work in progress but it is clear Google won't hesitate to buy whatever they feel will round out their offering. This could mean they are serious about bidding on a slice of spectrum. Stay tuned...

Disclosure: author does not own Google

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