6 ms·

Google closed 40 Acquistions this year, 37 of which under $17M on average

48 points by rexreed 16y ago

zach 16y ago
"During the nine months ended September 30, 2010, we also completed 37 other acquisitions for a total cash consideration of approximately $626 million. These acquisitions were not material individually or in aggregate." Mind-boggling. Well over half a billion dollars in non-material acquisitions! Only Google. Most here could easily identify the company from that single 10-Q line alone.
- deleted 16y ago
  [deleted]
  - sachinag 16y ago
    Too bad the SEC disagrees with you. Seriously, these terms have distinct, specific, and legally understood meanings. If you don't know what they are, then please don't pollute HN comments with your "pithy" thoughts.
    - thomasmeeks 16y ago
      We could all benefit from an explanation of these terms. Why not explain it to us instead of insulting the guy?
      - sachinag 16y ago
        Materiality comes from the effect of the acquired company on the purchaser's assets or income (I forget if it's pretax or net). Google has so many assets and so much in income that over half a billion dollars doesn't cross the threshold. When you do a material acquisition, you have to file financial statements for the acquired company. If it's 40% or more, you have to file pro forma financials, restating historical numbers for the go-forward entity as if it was one company for the past year (maybe two - again, I forget the specific details). The non-materiality is why we don't have financials for AdMob, even though Google paid $750MM for it.
skmurphy 16y ago
When Cisco started to do this many acquisitions their competitors begin to bid against them, increasing the price and lowering Cisco's ability to buy products and talent below market. That does not seem to be happening yet.
- btmorex 16y ago
  From what I'm hearing, Google isn't getting talent at below market prices. What's not immediately clear in the acquisition price is the ridiculous retention bonuses Google's paying to keep these people on board. In fact, I think they're paying through the roof for talent already... no need to for competitors to bid up the price.
  - skmurphy 16y ago
    Competitors can bid, not with the intent of winning, but with the intent of driving up Google's price. This certainly happened to Cisco. The retention bonuses are a way of making a side payment to the entrepreneurs that bypasses the investors. Competitors could also offer retention bonuses.
    - dennisgorelik 16y ago
      How can you bid without risk that you will have to pay?
      - skmurphy 16y ago
        You can't, but there is a value in the underlying team and product: winning and overpaying from time to time still resets the market when a competitor is making many acquisitions. It also gives you more access to the deal flow, because now you are seen as an active bidder, which in turn offers market intelligence from being able to interact with all of these early technology firms.
waxman 16y ago
The massive cash reserves of Google, Apple, and Microsoft are good news for startups.
- marclove 16y ago
  Good news for some startups. Not any that are looking for investors. At that average acquisition price, most investors would be disappointed.
  - waxman 16y ago
    Not really. For VC's perhaps that is the case, but for angels: $1 MM raised at a $3 MM pre, 2.5 years of work, and a (let's say) $12 MM median sale price? I think everyone is decently happy. This model fits with the ever-shrinking capital requirements to launch a tech company. Conversely, portfolio strategies that rely on huge exits (and huge investments) are increasingly threatened.
    - timcederman 16y ago
      But if $12 MM is the median sale price, then the risk no longer makes it worth it, especially with so many >= $5m valuations at the moment.
    - marclove 16y ago
      $1M at a $3M pre with a $12M acquisition means I'm getting a 3X return on my investment. Now that's certainly better than losing it altogether, but I think almost all angels would admit they'd be pretty disappointed in that outcome.
addoway 16y ago
Very good news for startups out there today! How many acquisitions has Facebook closed?

48 points by rexreed 16y ago

zach 16y ago

"During the nine months ended September 30, 2010, we also completed 37 other acquisitions for a total cash consideration of approximately $626 million. These acquisitions were not material individually or in aggregate." Mind-boggling. Well over half a billion dollars in non-material acquisitions! Only Google. Most here could easily identify the company from that single 10-Q line alone.

deleted 16y ago
[deleted]
- sachinag 16y ago
  Too bad the SEC disagrees with you. Seriously, these terms have distinct, specific, and legally understood meanings. If you don't know what they are, then please don't pollute HN comments with your "pithy" thoughts.
  - thomasmeeks 16y ago
    We could all benefit from an explanation of these terms. Why not explain it to us instead of insulting the guy?
    - sachinag 16y ago
      Materiality comes from the effect of the acquired company on the purchaser's assets or income (I forget if it's pretax or net). Google has so many assets and so much in income that over half a billion dollars doesn't cross the threshold. When you do a material acquisition, you have to file financial statements for the acquired company. If it's 40% or more, you have to file pro forma financials, restating historical numbers for the go-forward entity as if it was one company for the past year (maybe two - again, I forget the specific details). The non-materiality is why we don't have financials for AdMob, even though Google paid $750MM for it.

skmurphy 16y ago

When Cisco started to do this many acquisitions their competitors begin to bid against them, increasing the price and lowering Cisco's ability to buy products and talent below market. That does not seem to be happening yet.

btmorex 16y ago
From what I'm hearing, Google isn't getting talent at below market prices. What's not immediately clear in the acquisition price is the ridiculous retention bonuses Google's paying to keep these people on board. In fact, I think they're paying through the roof for talent already... no need to for competitors to bid up the price.
- skmurphy 16y ago
  Competitors can bid, not with the intent of winning, but with the intent of driving up Google's price. This certainly happened to Cisco. The retention bonuses are a way of making a side payment to the entrepreneurs that bypasses the investors. Competitors could also offer retention bonuses.
  - dennisgorelik 16y ago
    How can you bid without risk that you will have to pay?
    - skmurphy 16y ago
      You can't, but there is a value in the underlying team and product: winning and overpaying from time to time still resets the market when a competitor is making many acquisitions. It also gives you more access to the deal flow, because now you are seen as an active bidder, which in turn offers market intelligence from being able to interact with all of these early technology firms.

waxman 16y ago

The massive cash reserves of Google, Apple, and Microsoft are good news for startups.

marclove 16y ago
Good news for some startups. Not any that are looking for investors. At that average acquisition price, most investors would be disappointed.
- waxman 16y ago
  Not really. For VC's perhaps that is the case, but for angels: $1 MM raised at a $3 MM pre, 2.5 years of work, and a (let's say) $12 MM median sale price? I think everyone is decently happy. This model fits with the ever-shrinking capital requirements to launch a tech company. Conversely, portfolio strategies that rely on huge exits (and huge investments) are increasingly threatened.
  - timcederman 16y ago
    But if $12 MM is the median sale price, then the risk no longer makes it worth it, especially with so many >= $5m valuations at the moment.
  - marclove 16y ago
    $1M at a $3M pre with a $12M acquisition means I'm getting a 3X return on my investment. Now that's certainly better than losing it altogether, but I think almost all angels would admit they'd be pretty disappointed in that outcome.

addoway 16y ago

Very good news for startups out there today! How many acquisitions has Facebook closed?