UPDATE:Google CEO: We're Open To Making Strategic Acquisitions
October 15 2009 - 6:41PM
Dow Jones News
Google Inc. (GOOG) is open to making large and small strategic
acquisitions now that the worst of the economic crisis has passed,
the Internet search company's chief executive said Thursday.
"We're open for business, making strategic acquisitions, both
large and small," Eric Schmidt said during a conference call with
analysts. Schmidt's comments came as the company reported
third-quarter results that topped Wall Street expectations.
Schmidt had previously said the company was once again in a
buying mood, but his earlier comments seemed to downplay the
prospect that Google would be willing to consider large deals.
Schmidt noted that Google has typically bought small companies
that aren't very expensive but deliver a specific technology. He
added that Google has looked at a number of companies with
innovative search technologies, as well as a handful of startups
that have figured out better ways of sorting and working on display
ads.
He also said Google was looking at making acquisitions that will
improve its enterprise business, its Chrome products and its
Android mobile platform.
"We're certainly looking for larger businesses to buy, but in
those cases there would have to be some specific - some major,
major user base that we do not currently have access to, and so
they are going to be quite infrequent," he added.
Company executives stressed that after adopting a more
conservative approach over the past year, Google was once again
prepared to step up investment in a targeted and disciplined manner
that includes hiring more people across the company, particularly
in engineering and sales.
Schmidt said that while the pace of the economic recovery
remains uncertain, he has seen lots of signs that the worst of the
recession has passed.
"We're investing, and we're investing heavily," said Chief
Financial Officer Patrick Pichette.
Executives also touted progress in several key emerging
businesses. The company noted that mobile searches on Google grew
30% on a quarter over quarter basis, an indication that the mobile
market is extremely vibrant.
Schmidt noted that the fourth quarter will be a "very, very
critical period" for the company's mobile strategy, which is based
on the Android mobile operating platform.
Android adoption "is literally about to explode. You have all
the necessary conditions. You have the vendors. You have the
distribution and so forth," he said.
Pichette added that online video site YouTube was on track to
become a profitable business in the near future. Google noted that
roughly 90% of YouTube's U.S. home page inventory sold out in third
quarter, a huge improvement from prior quarters.
"We're monetizing more than a billion videos views every week on
YouTube," said Pichette.
Asked whether Google might put some of its cash to work
repurchasing shares, Schmidt told analysts not to expect a buyback
anytime soon.
Shares Google were up 3.2% at $547.00 in late trading, building
on the 52-week high the stock reached during the regular
session.
-By Scott Morrison, Dow Jones Newswires; 415-765-6118;
scott.morrison@dowjones.com