Google's Rules of Acquisition

waderoush writes "For many startup entrepreneurs, getting acquired by Google is the dream exit. But these days Google is getting a lot more discriminating about what kinds of companies it buys — and a lot more careful about how it integrates newly acquired teams. This article offers an in-depth look at how Google achieves a two-thirds success rate with acquisitions, and why things still occasionally go south. 'The return on our acquisition dollars has been extraordinary,' says vice president of business development David Lawee, Google's M&A czar. But Google insiders say it still takes a lot of work to make sure acquired startups go the way of Android (the mobile operating system, acquired in 2005) and not Aardvark (the social search site, acquired in 2010 and shut down in 2011)."

Comments

Amazing given the statistics.

[SexyKellyOsbourne]

The fact that Google achieves a 66.66% success rate in acquisitions is amazing. Most M&A's have a success rate of 17%.

According to a quote from the Wharton School of Business:

"Various studies have shown that mergers have failure rates of more than 50 percent. One recent study found that 83 percent of all mergers fail to create value and half actually destroy value. This is an abysmal record. What is particularly amazing is that in polling the boards of the companies involved in those same mergers, over 80 percent of the board members thought their acquisitions had created value.

— Robert W. Holthausen, The Nomura Securities Company Professor, Professor of Accounting and Finance and Management

http://executiveeducation.wharton.upenn.edu/open-enrollment/finance-programs/mergers-acquisitions-program.cfm

Re:Aardvark the extension

[Sneeka2]

Correction: Google's main business is ads. They just happen to go very well with search.