Web 3.0 & Google (Part 4)

Acquisition Strategy

Google has made several acquisitions this year. The key acquisitions were Adscape, Trendalyzer, Marratech, FeedBurner, PeakStream, GrandCentral, Postini and Jaiku. Google is yet to complete its $3.1 billion acquisition of DoubleClick Inc., a global leader in digital marketing technology and services.

Google’s acquisition strategy is different from most other companies. Google has mostly focused on acquiring early stage technology startups that can monetize its users rather than increasing the number of users, Postini being a good example. By and large, this analysis holds on all its acquisitions except YouTube, which is clearly still a largely unmonetized asset, and the acquisition was done in an attempt to gain a dominant position in the exploding video sharing market.

Google has done well to integrate and relaunch startups under its brand quickly (e.g. Writely as Google Docs, Urchin as Google Analytics and Keyhole as Google Earth).

My main concern is Google’s absence from big verticals like Jobs, Travel, Auto, Real Estate, Health and Personals. It could get a kick-start by acquiring the various vertical search engines in each of these segments, as I see a lot of search traffic moving to these vertical search engine sites over the next 2 to 3 years. What is good about these sites is that they are all based on search, and it would be very easy to incorporate them within Google.

In the online job space Google could consider acquiring job search engines like SimplyHired or Indeed. SimplyHired has raised $17.7 million in VC funding from News Corp.’s Fox Interactive Media and VC Foundation Capital. My favorite in the job search engine category, however, is Indeed, following an identical business model to Google’s keyword search, except that it is implemented for Job Search, specifically.

In the online travel space, the Company could consider acquiring Kayak or SideStep. Kayak has raised a total of $30 million since its launch in January 2004 from Accel Partners, General Catalyst Partners, Sequoia Capital and America Online. SideStep has raised more than $30 million in funding from Trident Capital, Norwest Venture Partners, PAR Capital, Saints Capital and Leader Ventures.

In the real estate space Google could consider acquiring Trulia. Trulia recently raised $10 million in Series C funding led by Sequoia Capital. The site has raised $17.7M in total VC funding since 2004.

Google News is popular among Google users and the Company could look at consolidating its position in the news space by acquiring social news sites like Digg. The Company could also consider acquiring Newsvine, NowPublic, and ShoutWire.

Other acquisitions to consider are business and finance properties like Seeking Alpha, online vertical search sites in the health space like Healthline and Spock, in the people search space.

(To Be Continued)

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This segment is part 4 in the series : Web 3.0 & Google
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