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— Dealmakers —
Google Inc. continues to make deal headlines. And with the Queen of Competition in the driver's seat, here comes Antitrust 2.0. The latest: May 29: DOJ probes possible tech hiring pact: Assistant Attorney General Christine Varney launches an investigation into hiring practices among high-tech companies. Thought to be among them: Google, Yahoo! Inc., Apple Inc. and Genentech Inc. May 26: Microsoft spends millions to challenge Google: At the All Things Digital conference, Microsoft Corp. was expected to announce a new search engine, dubbed Bing, and an ad campaign to go with it. Microsoft may also be positioning for a joint venture or acquisition; last week it registered a limited liability company in Delaware. - Baz Hiralal May 21: Of course Google isn't buying a newspaper: Google CEO Eric Schmidt tells FT.com the search engine giant isn't going to buy a newspaper. Duh. - Nathaniel Baker
May 12: NY Times exec approach to Google is pure fiction: New York Times board member Scott Galloway denies a Fortune.com article that alleges he approached Google co-founder Larry Page about a potential merger. - Gerald Magpily
May 11: More DOJ scrutiny of Google, Microsoft?; May 8: Google better get used to the antitrust spotlight; May 5: Varney uses Google to send message; and Apple, Google face FTC antitrust probe; April 29: Google draws new antitrust ire. GOOGLE MOVERS
April 30: AOL's Armstrong lures former Google colleague: Time Warner Inc.'s AOL LLC unit has lured another executive away from Google. AOL announced Thursday it has hired Jeff Levick as president of global advertising and strategy. - Suzanne Stevens (See also: March 17: Dennis Woodside replaces Tim Armstrong at Google) April 27: President Obama picks Google, Microsoft execs: Eric Schmidt, the CEO of Google, and Craig Mundie, the chief research and strategy officer of Microsoft, are the top tech dealmakers named to the president's Council of Advisors on Science and Technology, or PCAST. - Mary Kathleen Flynn April 27: Facebook hires former Google alliance executive: News Corp.'s MySpace isn't the only social networking site hiring top managers. VentureBeat is reporting that its rival Facebook Inc. has hired Priti Choksi, a former Google manager, to lead business development. - Suzanne Stevens
April 17: Google exec exits continue: A slew of executives has left Google over the last year, leading some to question if the search engine pioneer's best days are past. - Mary Kathleen Flynn Jan. 29: Obama taps former Google manager: The White House has confirmed to The Deal that former Google executive Katie Jacobs Stanton has been hired. A spokesperson could not confirm her exact title, which AllthingsD.com reported will be the very Web 2.0-sounding position of "director of citizen participation." - Mary Kathleen Flynn M&A, VENTURE CAPITAL AND MISSED OPPORTUNITIES April 15: New York Times passed on Amazon, Google, Yahoo!: Hindsight is 20/20, but the Times passed up some M&A opportunities and strategies that likely would have prevented its current financial problems. - Gerald Magpily
April 9: Google Ventures: Great time to put capital to work: Passionate entrepreneurs don't let macroeconomics stand in their way, say Google Ventures fund managers Rich Miner and Bill Maris. - Mary Kathleen Flynn (See more on The Deal Pipeline: Google forms $100M VC fund.)
April 3: Colbert killed Google's Twitter deal?: While TechCrunch published rumors of a Google bid for Twitter, Biz Stone, a Twitter founder, appeared on "The Colbert Report" for an uncomfortable grilling. - Matthew Wurtzel March 25: Google testing the waters for Pixazza purchase?: The online ad startup gets $5.75 million in a Series A round.March 13: Google cozies up to DOJ: The Internet giant offers an olive branch after last year's thwarted effort to partner with Yahoo! on a joint search business. (See more below.) - Cecile Kohrs Lindell March 12: Google Voice gets going, still lags Skype; Google moved into the online phone biz in July 2007 with its acquisition of GrandCentral Communications, a startup that lets users lump multiple phone numbers and voicemails (such as from BlackBerrys, home and cell phones) into a single account, manageable over the Web. - Baz Hiralal March 11: Google's new ad tech: Google institutes behavior-targeted ad technology culled from DoubleClick deal. - Olaf de Senerpont Domis March 4: Google CEO on M&A: Prices not cheap enough: It seems Google CEO Eric Schmidt doesn't think the recession has hit hard enough ... yet. At a Morgan Stanley technology conference, Schmidt said that the Internet search giant has been inactive in M&A because, while it has capital available, it's waiting for prices to go lower. - Baz Hiralal Feb. 13: WSJ's Thomson: Google devalues everything: The Wall Street Journal's Robert Thomson, Aspen Institute's Walter Isaaccson and U.S. News & World Report's Mort Zuckerman discuss the future of journalism on "Charlie Rose." - Mary Kathleen Flynn
Feb. 4: Google to TW: Spin off AOL? Buy our stake? Do something!: Time Warner, which just reported a $16 billion quarterly loss, has to be frustrated with Internet media company AOL LLC, which reported a 23% drop in quarterly revenue and also announced layoffs.- Baz Hiralal RECESSION PROOF? March 26: Google execs take $1 salaries, again: We know they're billionaires, and they've been turning down high salaries for years. Still, it's nice to have some model behavior to report on for a change. - Mary Kathleen Flynn
Jan. 15: Tech deal news: Google cuts and more: Google is killing off a handful of its services to "better focus our teams on the products that can have the most impact," according to the Google Code Blog. - Mary Kathleen Flynn
Jan. 7: Sorry Google; Verizon chooses Microsoft: So much for surprises. According to Bloomberg, Verizon Communications Inc. CEO Ivan Seidenberg gave attendees at a Citigroup Inc. conference Wednesday a heads-up on who he's choosing for a mobile Web search partner. - Baz Hiralal Dec. 23: Google phones in bonuses: Apparently, even Google is feeling the pain of the Great Recession and the pain is trickling down to their employees this holiday season. According to Gawker, the handsome cash bonuses the search giant has historically paid out to its employees will be replaced this year by a brand new mobile phone. - Brian Ward Dec. 11: Could the stars be aligning for a Google-N.Y. Times merger?; Dec. 9: MySpace teams with Google for more social Web
Nov. 12: Google weak, Yahoo! weaker: Take your pick of what's worse. Shares of Google traded below $300 a share for the first time since 2005 after analysts trimmed estimates for the company's fourth-quarter results. And if things are bad at Google (or at least not great), they must really be bad over at Yahoo!. Its shares were recently down 10% at $10.23 after trading as low as $10.02, and it seems only a matter of time before they reach single digits. - David Shabelman Nov. 10: Sun Micro drops Google for old foe Microsoft: Sun Microsystems Inc. and Microsoft have created a search alliance regarding Sun Micro's Java technology -- a striking development since Microsoft has paid more than $2 billion over the years to settle lawsuits filed by Sun claiming it was misusing Java. The deal acalls for Sun to offer the MSN Toolbar, powered by Microsoft Live Search, to U.S.-based Internet Explorer users when they download the Java technology. - Baz Hiralal
Nov. 6: Yahoo!, 'rewiring' and dumped by Google, runs back to Microsoft: At the Web 2.0 summit in San Francisco, Yahoo! CEO Jerry Yang said, "To this day, I have to say that the best thing for Microsoft [Corp.] to do is to buy Yahoo!.
I don't think that is a bad idea at all. ... At the right price,
whatever the price is, we are willing to sell the company," Cnet.com
reported. Yang's words didn't resonate well with our sister blog Tech
Confidential, which said it has become wearisome, and not particularly pleasant, having to repeatedly whack Yang in the back of the head like some recalcitrant teenager. - Baz Hiralal ANTITRUST ISSUES, AGAIN Nov. 5: With DOJ set to block Google-Yahoo!, Google pulls out: The Department of Justice told lawyers for Google and rival
Internet search company Yahoo! that the agreement
between the companies is a no-go. DOJ said it would announce its
decision to challenge the deal, according to
sources who asked not to be named. - Cecile Kohrs Lindell The run up: Nov. 4: DOJ challenge to Google-Yahoo! pact looms; Nov. 4: Google and Yahoo! dice ad deal to appease DOJ, naysayers; Nov. 3: Tuesday looms large -- for Yahoo!, Google; Oct. 31: Hope fades for Google-Yahoo! ad deal; Oct. 29: If Google deal crumbles, Yahoo!'s got no good options. Looking to Russia: Google unveiled plans for a strong push into Russia
July 18 with a $140 million deal for contextual advertising business
ZAO Begun, owned by Rambler Media Ltd. Come October, Russian regulators have blocked
the deal and Google is reviewing its options. Mobile search: "It's not the Gphone, but -- following a recent Sprint Nextel Corp.-Google Inc. mobile Web search deal -- Verizon Communications Inc. is nearing an agreement with Google Inc. on a wide-ranging partnership, including making Google the default search provider on Verizon devices, giving the search giant a share of ad revenue, The Wall Street Journal reported," The Deal's Baz Hiralal wrote Aug. 22. In late June, Google installed Patrick Pinchette, the former president of operations for Canadian Telecom BCE Inc., as CFO. Fortune suggested his expertise may come in handy if the company pushes hard into mobile, The Deal's Claire Poole noted. Going geothermal: Google unveiled plans Aug. 19 to invest $10.25 million in geothermal ventures AltaRock Energy Inc. and Potter Drilling Inc., while also extending a $489,521 grant to Southern Methodist University's geothermal lab. The Deal's Dave Shabelman noted the company had said in November it would start a renewable energy venture and has invested in eSolar Inc. and Makani Power Inc. Google joined investors for BrightSource Energy Inc.'s $115 million Series C in May. One painful investment: Google revealed in a SEC Filing in early August it had lost money on its $1 billion investment it in AOL, which, in December 2005 gave it a 5% stake and valued the target at $20 billion. AOL, Hiralal noted, may not be worth $10 billion. (For more on AOL, see a related Dealwatch.) Talking to the people: The Deal's Paul Bonanos offered up the highlights of an interview New Yorker's Ken Auletta conducted with Google CEO Eric Schmidt June 11. Meanwhile, Tech Confidential sat down with Google's content partnership chief David Eun in March for a three-parter. Watch the interview. Rumor front: In May, both Google and Rupert Murdoch's News Corp. were rumored to be interested in buying Internet video search engine Blinkx, a company around which deal rumors have swirled for some time. In April, Google was front-and-center in two other deal rumors -- one suggesting it could go after Expedia Inc. and another that it might either acquire Skype or partner with its parent eBay Inc. on some sort of deal involving the VoIP company. The question also arose earlier in the year whether Google and Microsoft were duking it out for Digg Inc. They were not, Digg's chief executive said March 7. Getting in on WiMax: Also in May, Google got in on Sprint Nextel Corp. and Clearwire Corp.'s $14.5 billion WiMax venture alongside other investors including Intel Corp. and Comcast Corp. Going to Mars: Kicking off April, Virgin Group Ltd.'s Richard Branson unveiled a deal with Google -- Virgle Inc. -- whose sole objective is to launch a human colony on Mars. (For more on Branson's dealmaking and adventurous endeavors, see Dealwatch: Richard Branson.) WHERE THE MONEY IS After Google, Microsoft and Yahoo! announced their second-quarter results, Cowen & Co. analysts in late July rejiggered their estimates for U.S. online advertising for the balance of the year -- reflecting a slowdown in online advertising and a positive outlook for search advertising, Shabelman noted. On April 18 Shabelman wrote: "Investors were falling over themselves Friday trying to buy shares of Google Inc. after the online search firm surprised Wall Street with its first-quarter earnings report. ... Much of the strength in Google's revenue came from its international operations, which rose by 14% compared to the fourth quarter and 55% year-over-year." DOUBLING UP Google's largest acquisition to date has been its $3.1 billion deal for online advertising group DoubleClick Inc. in 2007. That deal was cleared by U.S. regulators in December 2007 and cleared by European regulators in March 2008. And Google said Aug. 6 it would sell its search marketing business Performics, which it inherited from DoubleClick, to French advertising giant Publicis Groupe for undisclosed terms. The move is aimed at avoiding perception the unit could get favorable treatment in the Google's search results, The Deal's Alain Sherter noted. While Google awaited the green light for DoubleClick, the company set its sights on China with an undisclosed investment in Chinese social networking service Tianya.cn on Aug. 20, 2007. Terms of the deal, including the size of Google's stake, were not disclosed. Google's DoubleClick deal, unveiled April 13 was its largest, trumping its $1.6 billion purchase of the top online video sharing site YouTube Inc. in October 2006. The deal gave the company a large network of advertisers and Web publishers to serve and sell advertisements to. In addition, the deal is a shot in the arm to the search giant's banner advertising business, which lagged rival Yahoo! Inc.'s. What's also at the heart of the deal is the acquisition of a centralized platform that that gives media agencies and advertisers the ability to manage integrated search and display ad campaigns. The addition puts Google closer to market leader Yahoo! in the online display ad sector, temporarily giving it a leg up on Microsoft and, to a lesser extent, AOL. To finance the deal, Google dipped into its huge cash position of $11.1 billion as of December 2006. Some worried that Google paid too hefty price for DoubleClick. Shabelman noted that based on analyst estimates, the company looked to pay more than 30 times DoubleClick's trailing Ebitda of $100 million. Meanwhile, DoubleClick's peers -- aQuantive Inc., ValueClick Inc. and 24/7 Real Media Inc. -- all traded at less than 15 times Ebitda before the DoubleClick deal was announced. And then a flurry of online advertising M&A erupted. (Cox Enterprises Inc.'s $300 million -- plus earnout -- deal for Adify Corp. was April 29, 2008 the latest dig in the ad wars.) AD WARS But back then, and with in weeks:
A SWELL OF MOTION Competition has only incentivized Google to more action. The search giant took PeakStream Inc., which makes software to accelerate the performance of computers, off the hands of its former venture backers Sequoia Capital and Kleiner Perkins Caufield & Byers for undisclosed terms on June 6, 2007, days after announcing a deal for Feedburner, a company that helps bloggers and podcasters syndicate and monetize their content, for a reported $100 million. The company also struck deals that would broaden its offline reach including one arrangement with satellite television provider DirecTV Group Inc. to help it to generate advertising revenue. On the online video front, Google leapfrogged its competitors by acquiring YouTube for $1.6 billion in stock in 2006. Google outbid Internet and media rivals for the online property but it remains to be seen if the acquisition was worth the hefty price. One downside is that large media companies are prohibiting their content from being posted on YouTube because of copyright issues. Viacom Inc. is suing Google for $1 billion to keep its programming off YouTube. Prior to the YouTube deal and its IPO, Google focused on M&A deals for smaller to midsized companies. With its August 2004 public offering, Google's stock rose 18% on its first day of trading, opening at $85 per share and closing at $100.33 apiece. The stock was sold via a Dutch Auction, where a sale of 19.6 million shares generated $1.67 billion, a more than adequate war chest for future acquisitions. Google has gone on to become one of Wall Street's most high-flying stocks, currently trading in the $475 range due to strong sales and earnings in the advertising market. Visit the complete Dealwatch Archive |
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