It all started in Stanford in the mid-1990s with two bright students who disagreed on almost everything according to their classmates. These disagreements on many subjects did not prevent Sergey Brin and Larry Page from starting work in 1996 on a new search engine that would revolutionize the world of the Web.

You have without a doubt guessed which search engine I mean: Google. This is the same Google that is now crushing the search engine market around the world. Even better, Google, officially founded in 1998 by Sergey Brin and Larry Page, has grown to become one of the largest companies in the world by market cap!

In order to achieve this phenomenal success, Google, which has now become a subsidiary of Alphabet, has made more than 200 acquisitions since 2001. This figure is quite incredible and shows how voracious the Mountain View giant is. It is constantly looking to strengthen itself and predict the next move so that it is never overtaken in the merciless world of the Web giants. It must be said that the GAFAM universe is highly competitive and that a company such as Google can never rest on its laurels without knowing the fate of former fallen giants such as Yahoo!.

That said, I suggest you discover my Top 5 Acquisitions made by Google during its history.

Android — 2005

By buying Android from Andy Rubin in August 2005, Google once again has had a hollow nose. Since then, Google has successfully developed Android to become the leading OS in the smartphone world with a global market share of more than 80%!

Even better, Google has had the intelligence to perfectly integrate all its tools within Android. Initially, this strategy allowed Google to impose the use of its services and applications. The Google Play Store, YouTube, Google Maps and Gmail have become essential for most Android smartphone owners.

Secondly, it allowed Google to impose its law on Android smartphone manufacturers. Indeed, even if Android is an open source mobile operating system, it loses much of its value if the famous Google Play Services are not made available to the end user. However, to be able to use these Google Play Services, smartphone manufacturers must obtain the famous Android license issued by Google. To obtain it, you must comply strictly with the rules laid down by Google, including a mandatory emphasis on Google applications and services.

All this allows Google to generate even more revenue with Android. However, be careful because the European Union now seems concerned about what would look very much like an abuse of a dominant position. Sanctions have already been imposed on Google and it is not impossible in the future that Google will have to change the way it operates when it systematically promotes its other products on Android. This necessarily reminds us of Microsoft, which had to stop offering only Internet Explorer by default on its Windows operating system at the end of the 1990s, for example.

YouTube — 2006

The reference streaming platform in 2019 was purchased in October 2006 by Google for $1.65 billion. At the time, this amount seemed excessive for some. When you see what Google has managed to do with YouTube, you think it was a very good price! Today, the platform approaches 2 billion active monthly users while representing more than 6% of Alphabet’s revenues, Google’s parent company.

We often wonder what is more important between an idea and its implementation. In the case of YouTube, Google has clearly shown that implementation is often more important than an idea itself. As proof of this, I would like to come back to what happened to the Dailymotion platform, which was a serious competitor of YouTube when it was acquired by Google. More than 10 years later, Dailymotion is a dwarf compared to the giant YouTube. Google’s strategic choices have allowed YouTube to move up a gear while successive Dailymotion executives have multiplied the wrong choices.

DoubleClick — 2007

The American advertising agency was acquired in April 2007 for $3.1 billion before being integrated into AdSense, Google’s in-house solution. The idea here was to kill a competitor before he became too powerful. This strategy is not new but it has once again proved its worth for Google, which has thus been able to strengthen AdSense’s dominant position in this market.

To convince you of the importance of this strategy for giants like Google, I would like to go back for a moment to the history of Yahoo! In the late 1990s, Yahoo! was one of the most visited websites in the world with a search engine that was the reference. In 1998, Larry Page and Sergey Brin naturally offered Yahoo! to acquire their search engine technology for approximately $1 million.

Yahoo! refuses because this technology is radically different from theirs. As the years go by, Yahoo! maintains its dominant position to become the most visited website in the world in 2004. However, in the meantime, Larry Page and Sergey Brin have taken advantage of their superior technology to make Google a major player in online research.

The executives of Yahoo! then decided to try to buy Google by offering the two founders $3 billion. Larry Page and Sergey Brin are asking for a larger amount, up to $5 billion. Yahoo! finds this excessive and does not make the financial effort that would probably have changed the course of its history.

Looking at the respective positions of Google and Yahoo! today, we can therefore understand the quasi-existing importance for GAFAMs to make acquisitions of potential future competitors with promising technologies.

AdMob — 2009

More than ever leader in the world of online advertising with AdSense, Google knows full well that the phenomenal success of smartphones to come with iOS or Android will make advertising on smartphones a huge market. Google is therefore looking for AdMob, an extremely promising company in the world of mobile advertising.

In November 2009, Google finally acquired AdMob for $750 million. This amount is finally derisory when you see what this acquisition has brought Google afterwards. By 2019, Google is the leader in mobile advertising with AdMob and the leader in online computer advertising. DoubleClick and AdMob have therefore proved to be excellent acquisitions for Google.

Waze — 2013

Google acquired the mobile GPS navigation application Waze, which is based on user-definable mapping, in June 2013 for $966 million. Waze remains a standalone application on Android and iOS but Google uses the application’s data to improve the real-time content offered by Google Maps.

Another great acquisition for Google, which has continued to develop Waze in recent years to the point of making it the leader in mobile GPS navigation applications. Even better, the content generated for free by users in the Waze community benefits Google’s Maps service.

Last Acquisitions Were Less Successful

Google’s $12.5 billion acquisition of Motorola Mobility in 2011 remains the largest in its history, but it is a semi-failure for Google. Indeed, if this acquisition has allowed Google to strengthen Android’s position by recovering Motorola’s very substantial patent portfolio in mobile, it will have ended with a resale to Lenovo for just 2.91 billion dollars at the beginning of 2014.

The acquisition of Nest in 2014 for 3.2 billion dollars was needed to become a player in the world of home automation. Nevertheless, this purchase has not yet borne fruit. In 2017, Google chose to strengthen its skills as a smartphone manufacturer by acquiring HTC’s Pixel Phone division for $1.1 billion. This operation allows Google to produce its own Pixel smartphones, which are intended to be references in terms of best practices for smartphones running Android OS.

So, we see that the latest acquisitions of Google have been less successful than those made in the late 2000s. It makes sense because it is not possible to win every time.

The Next Major Acquisition Of Google Will Be In The Cloud World

Google continues, rightly, to try. Indeed, following the failure of Google+, several analysts claimed that Google had views on Twitter or Snapchat. However, this has never been achieved so far. In 2018, Google tried to buy major companies in the open source world. Thus, Google entered the dance for the acquisition of GitHub and then RedHat, which would have opened up many additional opportunities in the Cloud.

In the end, Google was defeated respectively by Microsoft which bought GitHub for 7.5 billion dollars and by IBM which bought RedHat for 34 billion dollars.

Google’s failure to buy RedHat is particularly damaging because it would have allowed Google to significantly improve its Google Cloud Platform offer. It wouldn’t have been luxury because in the Cloud, Google is still behind Microsoft with its Azure solution and even further behind Amazon and its Amazon Web Services. And everyone knows that it is not good to be the third player in a technological field.

Now, former Oracle executive Thomas Kurian is the Alphabet’s new head of Cloud. This appointment is a sign, in addition to CEO Sundar Pichai’s statements, that Google is looking to make major acquisitions in the coming months to bolster its cloud computing business. To do this, Google will rely on its 110 billion cash flow.

In June 2019, Google acquired Looker, a data analytics startup, confirming the trend of a strong strengthening of the company in the Cloud World. However, it seems clear that this acquisition is just the beginning for Google, which is expected to make bigger acquisitions in the Cloud World in the coming months. Google’s potential targets are not clearly identified, although some talk of interest in acquiring Salesforce.com to beat Amazon in the Cloud World.

We will follow what Google will do in the coming months but one thing seems certain, the next major acquisition of Google will be in the Cloud World.