Google will "buy a company a month"

 

Gallery

By Reuters

Posted on 25 Sep 2009 at 10:19

Google expects to buy one small company a month as it moves beyond the worst phase of the global recession, according to chief executive Eric Schmidt.

The search giant has historically maintained a steady pace of acquiring small, privately held companies, but its deal machine took a breather earlier this year when Schmidt said that prices were too high for his liking.

"Acquisitions are turned on again at Google and we are doing our normal maneuvers, which is small companies," Schmidt told Reuters Television, before delivering a speech on green technology on the fringes of the G20 summit in Pittsburgh.

"My estimate would be one-a-month acquisitions and these are largely in lieu of hiring," he said. "There may be larger acquisitions, but they really are unpredictable."

In the interview, which covered a wide range of subjects from new business initiatives to the various regulatory issues facing the company, Schmidt also reiterated his view that the worst of the global recession is over.

My estimate would be one-a-month acquisitions and these are largely in lieu of hiring. There may be larger acquisitions, but they really are unpredictable

"It's clear that the worst is behind us," he said. "What we see at Google is some level of improvement and what is more important is we see it not just in the United States but outside the United States."

Google has seen revenue growth slow during the recession, although its paid-search advertising business has held up better than other forms of advertising-based online businesses.

With nearly $22 billion in revenue last year, Google's large size makes it tough to grow at the 40% it once did. "I always worry about growth," Schmidt said. "Whenever you are a big company - Google now is a sizable company - where does the growth come from?"

Last week, Google stepped up its efforts to challenge Yahoo in the display advertising market with the introduction of its new DoubleClick ad exchange.

Schmidt said the exchange "could be a very significant part of our revenue over some number of years because ad exchanges, when they are running, grow very, very quickly."

However, some of Google's expansion plans, including a project to scan books and create a massive online digital library, have raised the attention of government regulators.

Schmidt said recent criticisms by the US Justice Department about the plan "seemed quite reasonable." If there are a "few minor changes" to be made to Google's settlement with groups representing authors and publishers, he said, "that's a pretty good thing to do."

"I don't think we will make significant changes to the deal," he said.