The relentless, daily stream of Google news tends to hide one important fact about the company: They've been buying a lot of smaller companies, in their ever-evolving quest to dominate the online ad market and shore up their defenses against disruptive innovations or nagging patent lawsuits.
The main take-away, of course, is that Google has actually been quite strategic about its biggest purchases: These aren't big-ticket impulse buys, as you might expect given Google's wild-and-wacky image as loving innovation for innovation's sake. In each case, from Double-Click to Ad Mob to YouTube, the focus has been on shoring up its core advertising business. (Granted, the AOL "acquisition" is actually more of a strategic partnership, but never mind. That's still a lot of money.) The fact is that Google keeps its bets on crazy ideas small and well distributed, while it reserves its biggest cheese for (almost) sure things.
The one seeming outlier, of course, is YouTube. But that was a different sort of bet: It hinged on the idea that Google was a master of monetization, and would be able to bring its ad-words intelligence to online videos, which hadn't really ever had a working business model. After some rather large hiccups—including a stunning rate of cash burn—it seems to be working, even as YouTube expands into original content in hopes of creating a more robust set of offerings to advertisers that would rather not be too attached to Keyboard Cat and Chocolate Rain.
Things actually get a bit more interesting in the latter part of the infographic:
If you think about Google as one giant bellweather of the state of innovation in the U.S., then the fact that 74 of its 102 acquisitions were of U.S. companies is a very good sign indeed. It would probably be worrying if, for example, Google had to look overseas for the best companies to buy. That might mean that Silicon Valley, the greatest innovation engine known to man, was losing some of its mojo. But that clearly doesn't seem to be happening, to judge by these data.
But the last, most interesting part is actually at the end, and totally obfuscated by the confusing data representation. Look at the line showing the number of acquisitions that Google has conducted. The last two years have seen a very large spike in buying activity — and 2011 isn't even done yet. It would be easy to read too much into that — to interpret Google as being desperate for new avenues of growth, for example. But at the very least you can say that Google isn't letting its enormous pile of cash sit around, as it once seemed so content to do.
[Top image by Images_of_Money]