What New York firms can learn from Google's acquisitions

In the past 10 years, Google has spent $23 billion in purchasing 145 companies. For the most part, these acquisitions have helped the company prosper and control various online content portals. According to many observers, one of the best investments that Google made was when it purchased YouTube for $1.65 billion in 2006. While some thought that the purchase price was high at the time, YouTube grossed $5.6 billion in 2013.

The technology that many people associate Google with is Android. It purchased the company in 2005 and let its founder develop the operating system that exists in 80 percent of all smartphones sold in 2014. Another one of its successful purchases was its acquisition of DoubleClick, which allowed Google to become a major player in online display advertising. The purchase of DoubleClick cost Google $3.1 billion in 2007.

However, not all of the acquisitions that Google made have been winners. One of the biggest money losers was the purchase of Motorola for $12 billion. The company then had to sell it for a quarter of its purchase price only two years later. However, experts say that it wasn't a total loss as it kept patents that should keep Android safe from competition in the future.

A large company such as Google may acquire smaller companies to gain access to their technology and people. These assets may be incorporated into a company's current product line or used to create new products. In some cases, an acquisition of a competitor that includes patents or other intellectual property can help a large company fend off upstart companies that could eat up market share. Companies that are looking to purchase other businesses may wish to talk to a corporate law attorney who may be able to help structure the transaction in a manner that would pass regulatory hurdles.

Source: NBR, "Google’s best and worst acquisitions", Josh Lipton, August 19, 2014

Source: NBR, "Google’s best and worst acquisitions", Josh Lipton, August 19, 2014

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