Google focuses dealmaking on key markets including online video and mobile

February 16th, 2012

Google is shifting the focus of its corporate acquisitions to a smaller number of thriving markets such as online video and mobile, the search giant’s head of corporate development has said.

The new approach will see Google switch from a more experimental period, when the company tried out many potential new markets, to making acquisitions in a handful of big strategic areas.

In an interview with the Financial Times, David Lawee, who is at the helm of Google’s mergers and acquisitions (M&A) programme, said the company has now focused its dealmaking on fewer, growing markets including online video and mobile.

With Mr Lawee leading its M&A drive, Google has made more than 100 deals – most of which have been small acquisitions. However, the YouTube and Doubleclick buy-outs gave the company a huge slice of the online video and display advertising markets.

Since taking over as chief executive last year, Larry Page has been overseeing efforts to bolster Google’s biggest bets, while closing several of the less strategic services it has taken on in recent years. Acquisitions to support YouTube, such as those of Next New Networks, an online video production company, and Widevine, which makes anti-piracy technology, are examples of Google using deals to expand its most promising businesses, Mr Lawee said.

“We think there will be tens of billions of dollars of value created by companies that are built on the YouTube ecosystem,” Mr Lawee said. “Anything we can do to accelerate that is in our interests.”

Google refuses to reveal the amount it plans to spend on acquisitions, but its net cash shot up by $9 billion (£5.7 billion) last year to reach $40.4 billion (£25.8 billion).

Referring to the scale of the new markets Google is creating, Mr Lawee added: “We believe we have a huge opportunity before us.”