Unearthing the Insights and Story about Google Acquisitions Over The Years
Recently, I was reading the news about acquisition by Google and became curious to explore the journey of their all acquisitions so far. I started procuring the pertinent data from protean sources and standardised it in a flat data file. To decipher, visualise and unravel the big stories from the data I used an awesome library - python-bokeh along with pandas. The story along with findings, facts and insights from the data are presented in this article. The interactive version is hosted here.
Since its inception in 1998, Google has acquired over 200 companies in eclectic categories (till the time of writing this article). Deja News was the first acquisition in February 2001 which ended up as the core component of Google Groups. As of Sep-2017, Halli Labs, HTC (portions), Bitium, and AIMatter are the most recent addition in the Google’s portfolio.
Very High level insights from the data:
- A myriad of acquisitions were observed in 2014–2015 when company reorganised them under new entity called Alphabet Inc.
- Till date, Motorola Mobility remains the most expensive purchase amounting to $12.5 Billion, followed by NestLabs, DoubleClick and YouTube among other dear acquisitions.
- Google acquired companies under disparate categories such as Mobile, AI, Cloud, Robotics, Maps, Communication, Search and Publication. The focus on Mobile was always higher, Artificial Intelligence was the second most loved domain.
- The top and recent acquisitions were observed this category. Plethora of companies acquired by Google were located within United States, while Canada and Europe were the other shopping places loved by Google.
Over the Years
Google acquired maximum number of companies in the period of 2012–2016 (about 40%) which was the same era of culmination of startup ecosystem. Current period of 2016+ is expected to beat any other time period in terms of procuring the companies. The foremost reason is the focus on artificial intelligence and mobile, which is the topmost priority of Google’s fast paced CEO Sundar Pichai. The rate of acquisitions as well as number of companies acquired has increased drastically over the years.
- Youtube in 2004–2008, Motorola Mobility in 2008–2012 and DeepMind in 2012–2016 are the noteworthy acquisitions of respective periods.
- Search in 2004–2008, Mobile in 2008–2012, and AI in 2012–2016 were the key interests of Google during these periods.
CEO vs CEO vs CEO
Eric Schmidt served as the the CEO for Google for almost a decade (2001–2011) before announcing the end of his tenure on January 20, 2011. Larry Page was appointed as the new CEO and served the position till 2015 before passing the torch to Sundar Pichai in late 2015. Page moved to take care of Google’s new entity and its parent company — Alphabet Inc.
Though Schmidt served the longest, number of acquisitions under him were least (33) as compared to acquisitions by his successors Larry and Sundar (90 and 82+ respectively). Larry Page initially acquired companies in Social space to protect and grow Google+. But around 2013, he began started laying the groundwork for Alphabet, acquired companies in AI, Home Automation and IOT. With over 82+ acquisitions just under 2 years, Sundar Pichai is the fastest CEO in terms of acquiring the companies. The acquisitions under Pichai reflects his versatile priorities — Virtual Reality, AI, Mobile and Photo Editing.
Focus Areas
Google acquired companies across protean categories such as — AI (34), Search (10), Cloud (8), Offers (9), Mobile (45), Security (6), Maps (13), Publishing (24), Communication (21) and Social (10). Maximum acquisitions were lead by Mobile category, followed by AI and Search. The focus on mobile was largely driven by competing market, accelerating innovation and choice in mobile computing. Buying companies of Mobile category provided Google the ability to control both hardware and software, by making its own integrated smartphones and other devices.
Mobile First to AI First : Artificial intelligence is a booming field, with revenue up 59 percent in 2017 to $12.5 billion and expected to surpass $46 billion in sales in 2020. Google has acquired the largest number of AI companies among other tech giants such as Microsoft, Apple and Facebook. Major AI acquisitions by Google include DeepMind, Kaggle Inc and API.ai. Majority of them were acquired in the period of 2013–2016
The Money Spent
Google has spent $24546000000 on their ten most expensive acquisitions. Most expensive purchase was Motorola Mobility, worth $12.5 billion, despite selling off Motorola to Lenovo for $2.9Billion, Google is holding onto the patents it bought when it acquired the company. Nearly $3.1 Billion was spent on NestLabs, a home automation company in 2014 to augemnt the IOT division, though reports suggested that Nest delivered less than expected following the acquisition. Another $3.1 billion was spent on DoubleClick, the ad technology foundation for digital advertising in 2007, which was double the amount Google paid to purchase Youtube in prior year for $1.65 Billion.
The Velocity of Shopping
Google started a bit slow during 2000–2004, but gradually started acquiring companies at higher pace. Since 2010, the rate of acquiring is, on average, more than two per month. The short time period of 3 months Jan-March, 2014 witnessed a large number of acquisitions tantamount to nearly 40 acquisitions. The gap between successive acquisitions, on average, also decreased drastically with time, from nearly 100–200 days in 2000–2004 has came down to 7–10 days in 2016.
The Acquisitions (by Year, Month, Category, Region & Amount)
All the acquired companies are visualized as nodes of different color, size, shape and coordinates. The notable yellow diamond is the Israeli company Waze (GPS Navigation Software) that was acquired for $966 Million. The acquisition was primarily aimed at improving Google Maps. DeepMind Technology from UK (plus shaped orange node), API.ai, and Apigee (circular shaped orange nodes) from US are recent additions in AI space, indicating the focus on enhancing google’s AI portfolio . Myriad of circles indicate majority of acquisitions from North America region, followed by plus shaped nodes — acquisitions from Europe region. Other significant nodes are Youtube, NestLab, Motorola and DoubleClick.