3 ms·

From the Google side I wonder if the underlying logic of these types of acquisitions is actually more originating on the Google M&A department side. There's pr

From the Google side I wonder if the underlying logic of these types of acquisitions is actually more originating on the Google M&A department side. There's probably some infrastructure needed to maintain a corporate Google M&A team which is probably is essential at the size of Google, but I can imagine there is a bit of downtime in between large deals that are actually exponentially value accretive (i.e. Youtube, Nest, etc.). If the downtime between rational M&A is too long, you probably start having staff attrition, in fighting/restlessness, lack of practice - not to mention a need to justify the existence of the department via OKRs to the rest of the company. Hence the need for some smaller, slightly less rational M&A deals to get done in order to keep the team in a ready state.

bradstewart 3y ago
No knowledge of Google specifically, but that M&A team is often part of strategy unit that's constantly looking at potential acquisitions to fill gaps in product offerings, valuing internal business units for possible sale, etc. So it's not just actually executing M&A. Once the target is identified, the actual deal execution often falls to lawyers/bankers.
- somethoughts 3y ago
  I'm curious about how compensation works for such internal M&A teams. Definitely I don't have any real insight into IBanking but as I understand there's usually IBanking M&A division whose activity (and corresponding compensation) generally revolves around two activities - generating pitch books to generate transactions and then generating transactions. I imagine for IBankers there's only incentives to generate transactions regardless of whether they are good or bad for the two parties actually involved in the M&A transaction. I'm not aware there's any activity/compensation tied to the long term (i.e. 10 year ROI) success of deals. It'd be smart if internal M&A divisions were held to higher standards - not only being measured on number of pitch books generated and transactions closed but also additional OKRs/compensation regarding the long term success of previous transactions for the company.

bradstewart 3y ago

No knowledge of Google specifically, but that M&A team is often part of strategy unit that's constantly looking at potential acquisitions to fill gaps in product offerings, valuing internal business units for possible sale, etc. So it's not just actually executing M&A. Once the target is identified, the actual deal execution often falls to lawyers/bankers.

somethoughts 3y ago
I'm curious about how compensation works for such internal M&A teams. Definitely I don't have any real insight into IBanking but as I understand there's usually IBanking M&A division whose activity (and corresponding compensation) generally revolves around two activities - generating pitch books to generate transactions and then generating transactions. I imagine for IBankers there's only incentives to generate transactions regardless of whether they are good or bad for the two parties actually involved in the M&A transaction. I'm not aware there's any activity/compensation tied to the long term (i.e. 10 year ROI) success of deals. It'd be smart if internal M&A divisions were held to higher standards - not only being measured on number of pitch books generated and transactions closed but also additional OKRs/compensation regarding the long term success of previous transactions for the company.