The problem from the other side is harder. Given that Google finds a talented startup team, how do they know that the startup is in a business that Google should be doing? Should Google ever turn down a good startup team? Most of what Google does is opaque to me. They are becoming the GE of the internet.
What is the purpose of a firm? Is it a collection of synergistic business ventures? A source of capital? Does it make sense to continually expand it's scope of activities? Would investors be better off if Google kept the equity it needed to run its search business and paid the rest out in a dividend to shareholders?
We think of the big boys as a black box - a black box full of money. I'd like to understand them, how they operate and how they could be better. I don't understand their purpose in pursuing many of these acquisitions, besides making sure their rivals don't buy the target first.
Acquisitions only really make sense if a company is creeping horizontally. Otherwise not that man opportunities make sense.
Say Apple decide to concentrate on what their exisitng lines (they've pretty much said so), how many startups would they find to buy? Probably not enough for a CAO.
I think one line of thinking in acquisitions is not just to get control of a product, but rather to take that startup team under the Google wing.
I am a firm believer in the idea that the most important asset that a company can have is its employees - even Google. Granted - acquiring a company and forcing the employees to work within the Google system is a piss-poor way of getting someone to work for you, but ultimately, how else can you get those crazy entrepreneaurs to work for you?
This acquire-to-hire plan backfires all the time - under performance, stagnation of the acquired product, etc etc, but I can see the appeal to it. At least, in theory.
What is the purpose of a firm? Is it a collection of synergistic business ventures? A source of capital? Does it make sense to continually expand it's scope of activities? Would investors be better off if Google kept the equity it needed to run its search business and paid the rest out in a dividend to shareholders?
We think of the big boys as a black box - a black box full of money. I'd like to understand them, how they operate and how they could be better. I don't understand their purpose in pursuing many of these acquisitions, besides making sure their rivals don't buy the target first.