Google’s David Lawee, vice president of corporate development and chief M&A boss, said around two-thirds of Google’s recent acquisitions have been successful, according to Xconomy’s Wade Roush.Google still has a pretty good track record compared to the industry standard, which is a success rate of around one-third to one-half, Xconomy reports.
That’s partially due to the care of Larry Page, who took over as CEO of Google last year and reorganized the company under several flagship products.
Now acquisitions have to mesh with those products if they’re going to be brought in successfully, Lawee told Xconomy. Each of Google’s product areas now has its own hiring targets, and Google does fewer manquisitions — only hiring teams if they fit into a distinct product area, Xconomy reports.
Here’s the money quote:
Around 2006, Lawee says, Google founders Larry Page and Sergey Brin started to feel that the company had built or accumulated too many separate products. Users were having trouble keeping them all straight. “Sergey spread this mantra internally that he wanted more features, less products,” says Lawee.
Google considers an acquisition a failure when it doesn’t incorporate its technology into a Google product or if the company “sunsets” the product. If the team leaves, it’s also considered a failure, Lawee said according to Xconomy.
Dodgeball, Dennis Crowley’s first company acquired by Google before he started Foursquare, is an example of Google’s failed manquisition strategy before the Page re-org. Lawee told Xconomy Crowley was “way ahead of us in terms of his vision.”
…Before the reorganization, Google’s acquisitions sometimes went south out of pure carelessness, or lack of forethought. Dodgeball, Dennis Crowley’s New York-based mobile social network, was the archetypal case.
“There was a misalignment. He didn’t get the resources he needed. In that case, it was a very small acquisition, and we weren’t as thoughtful about it.”
Page’s special care could be part of the reason as to why Google has yet to acquire a new company in 2012 more than two months in, according to AllThingsD. Google bought 79 companies in 2011, according to that report.
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