A new spate of Google-speculation was triggered late last week after the company said Thursday that it would raise more than $4 billion through a new stock offering. Combined with the roughly $3 billion of cash it currently has on hand, this will give Google a $7 billion war chest.
The company’s SEC filing apparently shed no real light on how the money would be used. A story by John Markoff in the New York Times cited the filing as saying “we may use proceeds of this offering for acquisitions of complementary businesses, technologies or other assets,” but also that “[w]e have no current agreements or commitments with respect to any material acquisitions.”
Earlier this week, [Google] quietly acquired Android Inc., a mobile computing firm based in Palo Alto, Calif., and founded by Andy Rubin, a former Apple Computer engineer who had been a founder of Danger Inc., a maker of a portable wireless data handset. As part of the deal, Mr. Rubin has joined Google.
Google also recently acquired Dodgeball, a social-networking site. In the last year, it purchased Keyhole, which developed a digital satellite imagery program; Picasa, which developed software for editing and sharing digital photos, as well as Applied Semantics, Blogger and Urchin.
A Business Week story focuses on the Android acquisition:
Android (www.android.com) has operated under a cloak of secrecy, so little is known about its work. Rubin & Co. have sparingly described the outfit as making software for mobile phones, providing little more detail than that. One source familiar with the company says Android had at one point been working on a software operating system for cell phones.
Google has been toiling to make its services more appealing to people who access the Net over cell phones and other mobile devices. In April, the company uncorked local-flavored search for mobile users. Also in April, it announced Google Short Message Service (SMS), which sends text-based information to mobile users seeking everything from driving directions to weather forecasts.
Rubin isn’t the only well-known Silicon Valley veteran joining Google via Android. Others coming over include Andy McFadden, who worked with Rubin at WebTV before helping develop the all-in-one set-top box for Moxi Digital; Richard Miner, former vice-president of technology and innovation at telecom outfit Orange before joining Android; and Chris White, who spearheaded the design and interface for WebTV in the late 1990s, before helping to found Android.
As we reported in early July, Google recently made an investment in Broadband over Power Line (BPL). That news was followed in mid-August by an Om Malik piece in Business 2.0 suggesting Google might create an alternative path to broadband users by linking its fiber optic backbone to Wi-Fi access networks.
In April it launched a Google-sponsored Wi-Fi hotspot in San Francisco’s Union Square shopping district, built by a local startup called Feeva. Feeva is reportedly readying more free hotspots in California, Florida, New York, and Washington, and it’s possible that Google may be involved. Feeva CEO Nitin Shah confirms that the company is working with Google but won’t discuss details. Google’s interest in Feeva likely stems from the startup’s proprietary technology, which can determine the location of every Wi-Fi user and would allow Google to serve up advertising and maps based on real-time data.
There’s also speculation that Google might invest some of its cash in China, where it owns a small stake in Baidu, a web service company that recently went public. According to a WSJ story by Kevin Delaney, “Goldman Sachs said in a research note that it expects any deals to be mostly in the range of $1 billion to $2 billion, and pointed to China and Russia as possible areas for acquisitions.”
Banc of America Securities Equity Research called “an acquisition of size” a likely use of the offering proceeds, pointing in a research note to Google’s previously stated intentions to expand aggressively in fast-growing Asian markets. Any such move by Google in Asia would follow Yahoo’s announcement last week that it planned to pay $1 billion in cash and hand over all of its Chinese operations to Alibaba.com Corp. in return for a 40% equity stake in the Chinese e-commerce company.
A mid-June post by Adrevan at Kuro5hin.org, a tech-focused community blog, provides a review of Google’s recent acquisitions up to that point in time, followed by Andrevan’s “picks for the companies Google should, could, will, may, perhaps is considering to, would be cool if they were to, might acquire.”
And how does Google’s war chest measure up to its arch-rivals Microsoft and Yahoo? According to Delaney:
Even after the offering, Google’s augmented cash hoard will be dwarfed by Microsoft’s. The Redmond, Wash., software company had cash and short-term investments valued at $37.8 billion as of June 30. Depending on the final offering details, Google would likely surpass Yahoo’s cash and short-term investment reserves of $4.9 billion as of June 30.
Mitch Shapiro at 2:23 PM|Comments(0)
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