Google's growth spurt
Search giant pushing into mobile, social realm with recent acquisitions, hiring
Mountain View's largest employer is growing at a fast clip even with some economists warning of the possibility of a double-recession and the Bureau of Labor Statistics reporting nationwide unemployment at 9.7 percent.
This year alone, Google has been snapping up companies at the rate of more than one per month — many of them Silicon Valley startups. From March 31 through June 30 this year, the company added 1,184 employees to its ranks worldwide.
Jane Penner, a Google representative, declined to comment on Google's acquisition strategy or how many employees the company has hired since the end of its second financial quarter, which ended June 30, but according to technology experts, Google's recent spree of acquisitions and hiring is aimed at growing the company beyond what its cash cow — search-based advertising — and into the realm of mobile technology and social networking.
Whatever Google's overarching strategy, the company's continued growth is a good thing for Mountain View's coffers, a city official said.
"When companies do well — both large and small — it bodes well for the city," said Tiffany Cheu, business development specialist for Mountain View.
Aside from the taxes the company pays directly to Mountain View, Cheu noted that Google employees patronize local businesses and often live and own property in Mountain View.
Additionally, the company provides the city with free wireless Internet service and Google co-founder Sergey Brin and his wife recently donated $35,000 to the Deer Hollow farm in Mountain View.
"They can afford it," said Tom Krazit, a senior writer for CNET, who has been covering Google for more than a year. He said he was not surprised by the recent acquisition spree and noted that Google's strategy ensures its cubicles will continue to be occupied with entrepreneurial, tech-minded innovators, as the company often pulls in the employees of the companies it purchases.
Fred Vogelstein, a contributing editor for Wired Magazine who has been following the company for about 8 years, was also unsurprised.
"Google has always acquired a lot of companies, and, in fact, you could argue that very little of what people think of as Google today they built in house," Vogelstein said.
Some of Google's most successful products were created outside the company and then bought. Such products include Picasa, Blogger, Maps, YouTube and, recently, AdMob.
Neither Krazit nor Vogelstein were shocked to see Google scooping up companies in the field of social networking.
"The thing that's interesting about social networking is how much time people spend on it," Krazit said. "The more time you spend on the site the more ads they can show you."
And that translates into big bucks for companies like Facebook, who can guarantee advertisers that their ads will be seen.
Google is "going to have to figure out a way to tap into this growing advertiser interest in social media," Krazit said.
Outside of the realm of social networking, Vogelstein said, Google is "trying to figure out how to compete with the iPhone."
He said that over the course of the next five years a lot of computing time is going to move from desktops and laptops to tablet computers — such as the iPad — and other mobile devices, like smart phones.
"Controlling the operating system and the ecosystem on those mobile devices is a vast new field for both Apple and Google to exploit," Vogelstein said.
According to Vogelstein, the "$64,000 question" with Google is "are they going to be able to figure out something else?"
The answer to that question could lie in its Android mobile operating system.
To make money off of its smart phone operating system, Google will not only try to have to get Android on to as many devices as possible, it will also sell mobile ads. Its acquisition of the mobile advertising company AdMob in May was aimed at doing just that.
In certain instances, however, Google may be less concerned with acquiring a given company's product and more interested in tapping its brain power.
"You take all these smart people and you throw them in a room with unlimited cash and computing power and see what they come up with," Krazit said. "It doesn't always work. But it seems that that's the way they like to do things."
Buying a rising company quickly also deprives competitors of the chance to do the same.