Google's Latest M&A Is A 'Coin Toss' - Should It Buy Billions In Revenue Instead?

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Google IncGOOG
is reportedly in talks to buy InMobi. The Indian startup assists other companies in targeting mobile users. According to
Reuters
, it would be Google's first startup acquisition in India. "Giant tech companies have so much cash overseas," Cody Willard, chairman of
Scutify
, a financial social network, told Benzinga. "They're gonna be looking to deploy some of that cash via acquisitions. Expect a lot more M&As both overseas and domestic ahead." Brett Golden, president and co-founder of
The Chart Lab
, explained why investors should care about this possible deal. "Google's been doing okay, but I think they're struggling," Golden told Benzinga. "I understand they're trying to push the innovation down the field. I just kind of feel that they're losing their relevance. I think they dominated in a time when they could and I think that's really rapidly changing. Search used to be really powerful. I think it's losing that. Now you have stiff competition from companies you never thought -- like Amazon." Golden believes that Google is trying all these different things (including acquisitions) to stay relevant. "They're failing at these things like Google Glass," he added. "Maybe eventually it won't be a failure, but right now it's not working."

Related Link: The Top 10 Analysts On Wall Street

'Coin Toss'

Sean Udall, CIO of Quantum Trading Strategies and author of The TechStrat Report, said that while the rumored Google/InMobi deal isn't bad, it is "sort of like a coin toss." "Google is going to keep doing this," Udall told Benzinga. "They have to keep doing this. I think what Google needs to start thinking about doing is bigger deals." Udall is worried that if Google
loses its search
deal with
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Apple Inc.AAPL
, it could offset any gains from its deal with
Twitter IncTWTR
. "[Google has] done a good job in investing from a VC standpoint," he said. "They need another YouTube-type deal or bigger. Maybe they need to get into big data." Udall said that if he was a senior exec at Google, he would push for the company to get more aggressive in M&As. He said the company could buy as much as $10 billion in revenue instead of betting on possible success stories that may or may not be the next big thing. Disclosure:
At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
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Posted In: Analyst ColorAnalyst RatingsTechAppleBrett GoldenCody WillardGoogleInMobiScutifySean UdallThe Chart Lab
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