6 Of Google's Acquisitions Over $1 Billion - And How They Worked
Google's (NASDAQ: GOOG) has acquired more than 100 companies since February 2001.
The search engine giant has not revealed how much it has paid for most of these firms. Among those that were reported, Google typically paid between $10 million and $100 million.
There is a handful, however, that crossed the $1 billion mark.
Some of those firms have proven to be invaluable to Google's business. Others are new additions that have yet to show their true value (or lack thereof).
Click through the slideshow to see which of Google's acquisitions cost more than $1 billion.
Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this slideshow.
© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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This might be Google's most important acquisition next to DoubleClick.
Purchased in October 2006 for $1.65 billion, Google decided to acquire YouTube after recognizing the potential of the firm.
Instead of re-branding the service as a "Google Video" or something along those lines, Google allowed YouTube to maintain its individual brand.
And unlike other major acquisitions, all of YouTube's employees got to keep their jobs.
This was a huge win for YouTube, which was founded in February 2005. At the time of the acquisition, Google reported that YouTube had more than 100 million video views every day.
Now YouTube has more than one billion unique users who visit the site every single month.
YouTube also helped Google add more than a million advertisers to its add platforms.Image Source: Wikimedia Commons
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At the time of the acquisition, DoubleClick may have appeared to be one very expensive company.
Hoping to cash in on DoubleClick's ad benefits, Google paid $3.1 billion for the firm in 2007.
At the time, Google said that it acquired DoubleClick to extend its ad network and develop deeper relationships with its partners.
The deal was initially thought to be in limbo since the U.S. Federal Trade Commission and European Commission had not immediately cleared the takeover.
Both commissions eventually gave Google their seal of approval, allowing the buyout to go through.
This has paid off for Google, whose ad business pulls in more than $30 billion annually.Image Source: Wikimedia Commons
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Officially, Google said that it acquired Motorola to supercharge Android.
That's a promising goal, but it cost Google $12.4 billion.
When the acquisition was first announced in the summer of 2011, many bloggers speculated that Google merely wanted Motorola for its patents.
In reality, Google paid $12.4 billion for several very specific reasons.
According to TechCrunch, the financial breakdown includes:
- $5.5 billion for intellectual property (patents and developed technology)
- $2.9 billion for cash acquired
- $2.6 billion for "goodwill"
- $730 million for customer relationships
- $670 million for other net assets acquired
Since that time, Motorola has released several new smartphones -- but only one was made with Google: the Moto X.
The deal has yet to pay for itself, but Motorola hopes that the Moto X will help Google change that.Image Source: Wikimedia Commons
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Investors may not think that a smart thermostat would be worth $3.2 billion to Google.
Google, however, seemed to be happy to pay that much for Nest Labs.
When the acquisition was announced in January 2014, Google CEO Larry Page praised the company's founders.
"Nest's founders, Tony Fadell and Matt Rogers, have built a tremendous team that we are excited to welcome into the Google family," Page said in a statement published on Google's investor site.
"They're already delivering amazing products you can buy right now -- thermostats that save energy and smoke/CO alarms that can help keep your family safe.
"We are excited to bring great experiences to more homes in more countries and fulfill their dreams!"
Founded by former Apple engineers Tony Fadell and Matt Rogers, Nest will provide Google with key information about energy use in consumers' homes.
According to CNNMoney, that data could be very valuable to energy companies.Image Source: Wikimedia Commons
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Waze, a community-based traffic and navigation app for iOS and Android, has an interesting history with possible (and eventual) acquisitions.
That rumor was eventually dismissed, but Waze remained a hot acquisition property.
Months later, reports claimed that Google had expressed major interest in the firm.
Google wanted Waze so much that it was thought to spend $1.3 billion to pick up the firm.
Thus, the company may not technically be in the $1 billion acquisition club, but it is close enough to make this list.
Officially, Google wanted Waze to help consumers outsmart traffic.
"We've all been there: stuck in traffic, frustrated that you chose the wrong route on the drive to work," Brian McClendon VP of Geo at Google, wrote on the company's official blog.
"But imagine if you could see real-time traffic updates from friends and fellow travelers ahead of you, calling out 'fender bender...totally stuck in left lane!' and showing faster routes that others are taking."
That's one of the game-changing features that Waze will bring to Google.Image Source: Wikimedia Commons
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Boston Dynamics (Maybe)
Google will not say how much it paid for any of the robotics companies it acquired, including Boston Dynamics.
Unlike its other acquisitions, Google has not been overly talkative about why it acquired these firms.
The reason for this secrecy is unknown. It could be due to the military contracts associated with Boston Dynamics, which builds innovative, animal- and human-like robots.
Last fall Boston Dynamics received a $10 million contract to modify one of its military robots.
The company had previously received $32 million contract to build a supply-carrying robot for U.S. Marines.
All told, this means that the firm has generated at least $42 million in revenue.
Boston Dynamics' videos have gained millions of views on YouTube, thanks to their creative robot concepts.
But is all this worth a billion dollars?
Google won't say. But if Boston Dynamics is capable of transforming its concepts into actual, usable robots, it might prove to be worth billions to Google, regardless of what the company paid.Image Source: Wikimedia Commons
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