Google to buy tech companies
Google has ruled out any acquisitions of major news organisations such as Dow Jones and will instead focus on acquiring user-generated content and small technology businesses.
Eric Schmidt, chief executive of Google, said the search giant was better off partnering with companies that produce news and other content, rather than buying them.
"We made a decision to focus primarily on user-generated content, and not on businesses where we would own the content," Schmidt said.
The company filed with US anti-trust regulators last week for approval of the $3.1bn (£1.57bn) acquisition of online advertising network DoubleClick and expects an initial response from officials in three weeks. Schmidt said buying larger companies such as DoublieClick was meant to plug holes in its business portfolio.
"We are more comfortable now than we were a few years ago to buy real businesses. But we are not doing it for competitive reasons. We are doing it because it is part of building out a portfolio.
"So I think the pace will accelerate, but it is not a fundamental shift and we are not going to do it every day," Schmidt said of the company's willingness to entertain larger deals.
Google announced the DoubleClick deal last month and acquired video-sharing site YouTube for $1.65bn in November.
At a press conference yesterday, Schmidt reiterated Google's stance of seeing itself as a technology tools maker and not a media content owner and said the company continues to view small technology acquisitions as the bread-and-butter of its merger strategy, mainly as a way to obtain new technology and talented engineers.
Examples of this approach include Keyhole, which is now known as Google Earth, and Urchin, now Google Analytics, which both had strong technical teams, a technology head start, and were bought relatively inexpensively in the hopes of later generating billion-dollar revenue streams, he said.
At the same session Larry Page, Google's co-founder, repeated his belief that the company could play a role in opening up journalism to more participants.
"There is some small number doing what you do. That number is probably too small, given the impact that you have on the world and the good that you do," he said.
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