Google Goes Crazy Over Acquisitions

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If a company wants to place itself in position for a big check from Google, being a little bit crazy helps. So does bringing in the kind of traffic that can make crazy money for Google.

Google Goes Crazy Over Acquisitions
Google Goes Crazy Over Acquisitions
Who Can Compete with Google?

Not all Internet users are created equal. Some of them provide value to the websites they visit, in terms of advertising clicks, impressions, or conversions. Some sites have a better ratio of these users than other sites in their niche.

If a startup has the benefit of this kind of audience, they may want to dash off an email to Google. The search advertising company could be interested. A Bloomberg report on Google’s chat with venture capitalists raised the point that the search advertising company responds well to crazy:

“We look at everything very carefully,” Salman Ullah, Google’s director of corporate development, said yesterday in a speech at a meeting of the Los Angeles Venture Association. “The really crazy ones do really well.”

“The crazy ones mean they ignore the usual restraints of investment levels required or design parameters or ‘Gee I need more servers than anyone ever thought was possible’,” Ullah said. “When you free yourselves from these constraints, you create crazy, cool things.”

YouTube may be the craziest company Google has acquired, if the size of the deal serves as a barometer. The deal that brought the video sharing company into Google’s corporate apparatus was reportedly worth around $1.65 billion. Crazy money.

One might think Google is crazy for an approach to acquisitions that seems to draw as much from gambling as from analyzing P/L statements. But the Monte Carlo analysis method Ullah said Google has used in the past has nothing to do with Brioni tuxedos, vodka martinis, and suave British super agents.

“We don’t do traffic for traffic’s sake,” he said. “It has to be highly monetizable.”

Google’s market cap runs in the $145 billion range. That’s crazy money. But when it comes to finding a purchase that can help them become more valuable, those Googlers are crazy like a fox.

Google Goes Crazy Over Acquisitions
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