Google's the king of deals, new report says

With its online ad business cranking out all kinds of cash, Google has become a top M&A dealmaker these days. In fact, a recent report from Bloomberg says the Internet giant “has executed more deals than any company in the world over the last three years.”

And that’s kind of interesting, especially since it seems like Internet rivals Facebook and Yahoo are drawing a lot of attention for a flurry of their own acquisitions, mostly small acqui-hires.

Google has had some big deals of late. It agreed last month to pay $3.2 billion for Nest, a maker of “self-learning” thermostats and other home gadgets. It also reportedly beat out Facebook by paying $1 billion last summer for the mobile navigation startup Waze.

And in recent months, the company has snapped up eight robotics companies for a hush-hush project led by Google’s former Android software chief, Andy Rubin. It also bought DeepMind Technologies, a British artificial intelligence firm, last month.

All told, Bloomberg estimates Google was involved in 127 deals, worth a combined $17.6 billion, over the past three years. That’s more than double the number from 2008 to 2011, said Bloomberg, which counted Google’s investments in other companies as part of that total.

Google invests in newer start-ups through a corporate arm called Google Ventures; it’s also formed a separate group called Google Capital to invest in later-stage companies. The former recently put money into the Uber car-booking service, while the latter invested in SurveyMonkey.

Of course, one of Google’s biggest deals didn’t exactly turn out as planned – at least in the view of critics who questioned the wisdom of paying $12.5 billion for Motorola Mobility two years ago, and then selling the smartphone business to Lenovo for $3 billion. But in an interview published this week, Google M&A chief Don Harrison told Fortune’s Miguel Helft that he views the deal as “a success for us.”

The Motorola business came to Google with $3 billion in cash, and Google later sold a TV control-box segment for $2.5 billion, Harrison noted. That means Google was still out about $4 billion, but Harrison said he views that as a fair price for Motorola’s mobile technology patents, which Google is keeping.

Why is Google doing all these deals? Well, it has plenty of cash – $58 billion at the moment, which Bloomberg notes is “larger than the economy of Tunisia.” And while its core business is still quite strong, it’s growth rate is slowing.  CEO Larry Page, meanwhile, is pushing the company to find new “moonshots” or big bets to invest in.

 (Photo of “Android” figures at Google’s main campus/Brandon Bailey)

 

Brandon Bailey Brandon Bailey (324 Posts)

Brandon Bailey covers Google, Facebook and Yahoo for the San Jose Mercury News, reporting on the business and culture of the Internet.