Five Companies Google Should Buy in 2012 - Apple (NASDAQ:AAPL), Adobe (NASDAQ:ADBE)

Apple may have more cash on hand, but Google is the one who loves to spend.

By the end of 2011, Google (NASDAQ:

) had spent $1.9 billion on a total of 79 acquisitions,

reported. Comparatively, Google spent roughly half that amount on acquisitions in 2010 and added just 48 companies to its roster. In 2012, Google plans to continue acquiring new companies that will either enhance its existing businesses or create new cash cow opportunities (like Android and YouTube). On that note, which five companies should Google buy next?

5. Adobe

Over the past 12 months, there were numerous rumors about which (if any) tech giant might attempt to acquire the Photoshop maker. Apple was the frontrunner. But many thought that Microsoft (NASDAQ:

MSFT

) may also take control of the company. In either case, the consumer would lose. While the majority of Adobe's (NASDAQ:

ADBE

) products may have remained on Windows and Mac OS in the beginning, there's little doubt that they would have slowly shifted to one platform. The same

could

be true if Google were to acquire Adobe. But most of Google's profits come from consumers who use its products (search, maps, e-mail, video, etc.) on a Mac or Windows PC. There would be no point in making Photoshop or any other Adobe product a Chrome-exclusive, especially when the current Chrome OS is designed to be a light operating system for everyday tasks, not graphic-intensive editing. But never mind the consumer benefits. This is about Google, which could use Adobe to strengthen its creative arm. Few software companies are as serious about the cloud as Adobe, which is perfect for Google.

4. Sony

The word on the street is that Google hates manufacturing, does not want to make a single product of its own, and did not buy Motorola (NYSE:

MMI

) for anything other than its patents. If that's all true, then Google has no use for Sony (NYSE:

SNE

). But if Google is at least intrigued by the

potential

of hardware manufacturing, the search engine giant won't find any corporation more diverse than Sony. From gorgeous televisions and iPod docks to pricey laptops and game consoles, Sony isn't afraid to try its hand at a wide variety of electronics, regardless of the risks. The company operates on a “if at first you fail, try 20 more times” philosophy that all but guarantees the PlayStation 4

won't be cancelled

. How many other tech companies are that persistent? Vaio laptops aside, Sony's electronics are typically very sleek and attractive in design. Even the original, over-sized version of the PlayStation 3 looked great. PlayStation Vita may not have any good games, but the device itself is beautiful. These are the kinds of things Google could use to strengthen its presence in the tech world, and repair or remove the elements Sony can't get right on its own.

3. Sprint

One has to wonder why Google hasn't already acquired Sprint (NYSE:

). Is it because the company does not plan to go beyond OS development? That would be at odds with its Motorola acquisition, wouldn't it? Maybe Google is waiting on Sprint because it thinks it can get a better deal. And with shares plummeting over the last six months, it probably can. Or maybe Google thinks that Sprint isn't worth acquiring. But as the number-three cellular carrier in America, Sprint could give Google an unprecedented opportunity to invade our privacy, harvest data, and increase its revenue stream.

2. Netflix

This is an acquisition that no one would see coming. While Verizon (NYSE:

) was rumored to be eyeing Netflix (NASDAQ:

NFLX

) (along with Amazon (NASDAQ:

AMZN

) and a handful of others), most experts think that Google will acquire Hulu. There is

more than enough evidence

to support this assumption. But while Hulu is a growing brand that could do a lot for Google, only one video service comes with a pre-installed user base of 20 million people: Netflix.

1. Avid

Several years ago, Apple (NASDAQ:

AAPL

) acquired a small video editor called Final Cut. Avid (NASDAQ:

AVID

) was the industry leader at the time, mostly because of its groundbreaking user layout. But it was also very expensive. Apple saw this as an opportunity. By designing a cheaper (but nearly as powerful) video editor, the company could sell Macs to schools, students, and indie filmmakers. This strategy worked marvelously. And after several years of building up the Final Cut brand, Avid's dominance was finally challenged. Then in 2011, Apple decided to

destroy its own thriving product

and replace it with a weaker video editor that no one wanted. This gives Google the perfect opportunity to step into the spotlight. With a market cap of less than $400 million, Avid could be acquired for very little coin. Google could then restructure the company and its products (something Avid's current corporate team is reluctant to do) and release a lower-cost version that's friendly to schools, students and indie filmmakers alike. In one fell swoop, Google could take over the market Apple just threw aside. With some clever branding and a more powerful Chromebook, Google could even use Avid to sell a few laptops.

Follow me @LouisBedigian

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