Google Acquisition Spree Breaks 2010 Record

Google is continuing to flex its financial muscle after it was revealed it had spent more than $1.4 billion (£875m) to purchase 57 companies of various sizes and persuasions.

The 57 purchases tops the company’s previous record of 48 acquisitions from 2010.

Acquisition Streak

The acquisition streak was revealed in a 10-Q filing with the Securities and Exchange Commission, which showed that it had paid $941 million (£588m) in cash for three deals alone.

That sum includes $676 million (£423m) for flight software provider ITA Software in April; $151 million (£94m) for restaurant review guide maker Zagat; and $114 million (£71m) for daily deals asset Daily Deals, both in September.

Google paid another $502 million (£314m) on the other 54 companies. These acquisitions were not material individually or in aggregate, according to Google. Google also bid in August to acquire Motorola Mobility for $12.5 billion (£7.8bn), but that isn’t likely to close until 2012, due to current regulatory scrutiny.

Google isn’t done with M&A either. The company spent that much and picked up that many assets only through September, which means that it acquired more than 6 companies a month to date. With 3 months left in the new year, it’s possible Google could tack another 10 or 15 purchases before 2012.

Google Strategy

Why buy all of these companies and what’s the grand plan? Most of the buys have been cloud-based players that bolster the company’s local search, advertising, video and social software services.

Ultimately, Google is weaving a fresh tapestry of web services and applications into its Google+ social network, which it hopes to make the centre of the user experience.

ITA has been used in Google Flight Search. Zagat will be used in Google Places for local business search.

Daily Deals, along with loyalty card provider Punchd, coupon provider Zave Networks and daily deals aggregator DealMap will likely be used to fortify the Google Offers deals and Google Wallet mobile payment services.

Google’s YouTube arm bought video producer Next New Networks, which is being used to help fashion new channels on YouTube, as well as Fflick for social sentiment analysis and Green Parrot Pictures for video processing.