G-Libs
If the word game Mad Libs was part of your childhood, then you'll surely be able to appreciate Paul R. La Monica's (tech) take on it. While speculating on Google's acquisition behaviour, La Monica suggests that you can generate your own Google take-over rumour with the following formula:
Sources close to Google said (name of day) that the company is in talks to buy (company) for $(number) billion. A deal would give the online advertising leader a strong position in (industry). Sources said discussions were still in (adjective) stages and that talks could (verb.) Although Google has made several acquisitions lately, analysts said it can still afford more since the company has $12.5 billion in cash and a market value of $177 billion. (Exclamation!)
Fun and games aside, however, La Monica does conclude his post with an interesting observation about Google's acquisition behaviour:
Google will certainly buy more companies. But average investors hoping for a windfall may have to keep waiting. What’s funny about all the rampant takeover speculation is that Google has yet to buy a public company.[...]
Of course, there is a first time for everything so maybe Google will one day find a public company to its liking. But Google still acts very much like a private company. It doesn’t give earnings or sales guidance, spends heavily without worrying about short-term hits to profits and has a dual-class stock structure that gives majority voting control of the company to CEO Eric Schmidt and co-founders Larry Page and Sergey Brin.
With that in mind, maybe Google would rather not pay a frothy premium for a company whose stock has already been bid up on takeover speculation. Google may also think the hassles of digesting a company that has its own links to Wall Street are not worth it. So instead of looking at downtrodden public companies as Google’s next targets, people should focus instead on the portfolios of Silicon Valley’s most prominent venture capital firms.
As much as folks like Rupert Murdoch won't ever have to worry about selling (out) their shirt to the leviathan of search, this pattern is a double-edged sword. After all, against the backdrop of Google's simultaneous growth and expansion into other industries, it seems that if you're not a likely candidate for a Google acquisition, your days as an A-lister in your respective field are pretty much numbered.


















