Google is a multinational corporation with some expensive tastes. News broke out recently that the search engine behemoth acquired navigational app Waze for a mind-blowing $1.3 billion. Even with Google’s spend-happy acquisition history, this purchase is not one of its costly ones. Here are ten acquisitions that are more expensive than Waze. The numbers are not surprising given that the corporation has been estimated to run more than one million servers in data centers around the world and to process over one billion search requests and about 24 petabytes of user-generated data each day.
10: Like.com visual search, $100 million+
Google bought this visual search company in 2010, and put the experts to work to build a search vertical for women’s fashion called Boutiques.com. Like.com continues to operate as a separate entity from Google operations. Bambi Francisco of MarketWatch described Like.com as “the next evolution of comparison-shopping engines, such as Google’s Froogle, eBay’s Shopping.com, EW Scripps’ Shopzilla or Become.com and the next evolution in image search offered by the portals and search engines.
9: Applied Semantics, $102 million
Experts may think Android is Google’s greatest acquisition, but from a pure ROI consideration it’s hard to beat the Applied Semantics acquisition, which built AdSense — the paid search advertising platform that’s responsible for most of Google’s revenue and profits today. Just look at the ads on this site, they are all part of the Google Adsense program. The acquisition gave Google new traffic for its paid listings and new strengths in the world of advertising space. It also significantly hurt one of Google’s competitors — Overture. Applied Semantics was one of Overture’s top 10 partners, generating traffic for Overture’s paid listings through one of its programs.
8: dMarc automated radio ad placement, $102 million
It was a move that was supposed to permit Google to expand its AdWords platform into the radio medium. However, the buy turned out to be nothing but a failure and the worst decision Google has ever made. In 2006, the search engine giant paid $102 million for this platform for automatic placement of radio ads, and offered a whopping guarantee of up to $1.1 billion. But the business was never successful, and Google had to shut the program down in 2009. But Google Adsense is still good.
7: On2 video compression, $133 million
Google tried to buy this video compression company for $106 million, but its shareholders held out for a higher price and eventually got $133 million in January 2010. Last summer, Google announced it would open-source the VP8 video codec it acquired with On2, and rename it WebM. Google has since tried to push WebM as a replacement for H.264, a much more widely used standard for Web video.
6: Slide social gaming, $228 million (estimated)
Google bought this social gaming company in August of 2010 for $228 million. Slide still operates but Slide founder Max Levchin has reportedly been working on another secret new social initiatives -now determined to be Google +. Great minds think alike, if you ask me.
5: Postini email security and services, $625 million
Google purchased this email security company in June 2007 and introduced it as an add-on to its email services, like spam-blocking. It’s been a critical part of Google’s enterprise apps business ever since, especially for business users. The acquisition of Postini came as a shock to the business world following rumors that the company was working towards an IPO.
4: ITA travel service, $700 million
Google made a $700 million bid for ITA, which compiles flight information for airlines, travel agencies — and other search engine corporations. The bid had so many competitors of Google, who relied on ITA’s services, complaining, including Microsoft (Bing) and Kayak. The U.S. Department of Justice reportedly considered blocking it.
3: AdMob mobile advertising, $750 million
Android is all about increasing mobile search usage today, but Google hopes to make mobile advertising in general into a huge business. That’s why it paid $750 million for AdMob in November 2009. Since then, however, AdMob execs have left — including former CEO Omar Hamoui (pictured here) — and sources have said the integration isn’t going so well.
This deal was not surprising: Google had always been pegged as AdMob’s most likely acquirer.
2: YouTube video sharing site, $1.65 billion
In their second largest acquisition to date, Google has acquired YouTube for $1.65 billion in an all stock transaction. Both companies have approved the deal, which should officially close in the fourth quarter. YouTube’s 65 employees will remain with the company at YouTube’s San Bruno headquarters. The history of YouTube began on February 14, 2005 when three former PayPal employees activated the Internet domain name “YouTube.com” and started to create a video-sharing website on which users could upload, share, and view their videos and movies. Details also emerged that Yahoo was in the bidding war until the very end.
Now the subsidiary of Google is home to more than 1 billion unique users per month and over 6 billion hours of videos per month —that’s almost an hour for every person on Earth. Not to mention 100 hours of video are being uploaded to YouTube every minute.
1: DoubleClick display ad technology, $3.1 billion
DoubleClick Ad Exchange is a real-time marketplace that helps ad networks, agency holding companies, and emerging third-party technology providers maximize ROI across millions of sites. The 2007 acquisition of DoubleClick launched Google into the display advertising business. It’s been a mixed bag. Google boasts that it’s making $2.5 billion a year from display, but about $1 billion of that is from YouTube. Also, display advertising isn’t nearly as soliciting for the search engine giant as its core search advertising business. Still, display advertising is a big business, and Google has to be in it. Buying DoubleClick was a lot faster and easier than building a display business from scratch.