It used to be that investing in Google meant you were investing in a search engine or an advertising business.
You were investing in a company that understood its core compentencies – algorithm development and ad sales – and was trying to develop new sources of revenue based on them.
Now when you invest in Google, you are actually just investing in one guy: Larry Page.
Google is now Larry Page, Incorporated.
When Google shocked everybody yesterday by announcing that it had acquired all of Motorola Mobility for $12.5 billion – and not just its patents for a few billion dollars – it reminded one ex-Googler source we have of a story from March 2007.
Back then, Google was still trying to claw its way into the display advertising business. So the company set its sights on New York ad-serving firm DoubleClick. Eventually, Google made a $3.1 billion offer to buy it.
Before the deal could be announced, though, Google had to figure out what to do with a small division inside of DoubleClick called Performics.
Performics was a search-engine marketing firm – it bought Google ads for ad agencies and their clients. There are dozens of competing search engine marketing firms, and they all send a lot of money Google’s way. Owning Peformics would have created a conflict of interest for Google, and it might have even stirred up anti-trust trouble. Something had to be done.
A group of executives at Google eventually found a way out: Google would spin Performics out of DoubleClick, and sell it to holding firm Publicis.
Only one major force inside of Google hated the plan. Guess who? Larry Page.
According to our source, Larry tried to sell the rest of Google’s executive team on keeping Performics.
“He wanted to see how those things work. He wanted to experiment.”
But Larry wasn’t CEO back then, and he was over-ruled. Good thing, too. Thanks to a painstaking anti-trust review process, it took 11 months for Google to finally close the deal on DoubleClick. If Google had tried to keep Performics, it might have derailed the whole thing.
These days – now that he is CEO – there is no one left to overrule Larry Page when he wants to “experiment.”
So – and we’re speculating here – when Page sat down with Motorola Mobility CEO Sanjay Jha a month ago in order to talk about acquiring some patents for a couple billion dollars, no one had the authority to stop him from taking the talks further. When Apple reported truly remarkable earnings a week later – thanks to its seamless integration of software and hardware – a lightbulb went off in Page’s head that nobody else could switch off.
These days, when Larry Page wants to “experiment,” Google will experiment.
This might be a good thing!
Apple is Steve Jobs, Inc. Amazon is Jeff Bezos, Inc. When it was thriving, Microsoft was Bill Gates, Inc.
All of those companies have done pretty well following big, risky bets made by CEO/cofounder types.
The difference between those guys and Larry Page is that Jobs, Bezos, Gates, and even Zuckerberg have a proven track record.
Let the experiment begin!