Toronto's Business Lawyer Blog

2011 definitely proved to be a busy year for Google when it came to corporate acquistions, as it reflects the vociferous demand of the Internet / technology giant to further its growth and expansion by way of corporate acquisitions of what it deems to be significant pieces to the puzzle.

The companies which it purchased over the course of 2011 include: eBook Technologies (E-book company to be integrated into Google Books; SayNow (Voice Recognition company to be integrated into Google Voice); fflick (Social networking service company to be integrated into YouTube); Zynamics (Security); BeatThatQuote.com (Price comparison service company to be integrated into Google Advisor); Next New Networks (Online video company to be integrated into YouTube); Green Parrot Pictures (Digital video company to be integrated into YouTube); PushLife (Service provider); TalkBin (Mobile software company to be integrated into Android); Sparkbuy (Price comparison service company to be integrated into Google Product Search); PostRank (Social media analytics service); Admeld (Online advertising company to be integrated into DoubleClick and Invite Media);  SageTV (Media Center); Punchd (Loyalty program company to be integrated into Google Wallet); Fridge (Social groups company to be integrated into Google+); PittPatt (Facial recognition system company to be integrated into Android); Dealmap (One deal a day service company to be integrated into Google Offers); Motorola Mobility (Mobile device manufacturer company to be integrated into Android and Google TV); Zave Networks (Digital coupons company to be integrated into Google Offers); Zagat (Restaurant reviews company to be integrated into Google Places); DailyDeal (One deal a day service company to be integrated into Google Offers); SocialGrapple (Social Media analytics service company to be integrated into Google+); Apture (Instantaneous search company to be integrated into Google Search); Katango (Social circle organization company to be integrated into Google+); RightsFlow (Music rights management company to be integrated into YouTube); and Clever Sense (Mobile application).

However, how these particular acquisitions will impact the advancement of Google's corporate objectives, is subject to uncertainty and risk, as is clearly stated in their 10K Report for the fiscal year ended December 31, 2011 and filed with the Securities and Exchange Commission:

Acquisitions are an important element of our overall corporate strategy and use of capital, and we expect our current pace of acquisitions to continue. These transactions could be material to our financial condition and results of operations. We also expect to continue to evaluate and enter into discussions regarding a wide array of potential strategic transactions. The process of integrating an acquired company, business, or technology has created, and will continue to create, unforeseen operating difficulties and expenditures. The areas where we face risks include:

•  Diversion of management time and focus from operating our business to acquisition integration challenges.

•  Implementation or remediation of controls, procedures, and policies at the acquired company.

•  Integration of the acquired company’s accounting, human resource, and other administrative systems, and coordination of product, engineering, and sales and marketing functions.

•  Transition of operations, users, and customers onto our existing platforms.

•  Failure to obtain required approvals from governmental authorities under competition and antitrust laws on a timely basis, if it all, which could, among other things, delay or prevent us from completing a transaction, or otherwise restrict our ability to realize the expected financial or strategic goals of an acquisition.

•  In the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political, and regulatory risks associated with specific countries.

•  Failure to successfully further develop the acquired technology.

•  Cultural challenges associated with integrating employees from the acquired company into our organization, and retention of employees from the businesses we acquire.

•  Liability for activities of the acquired company before the acquisition, including patent and trademark infringement claims, violations of laws, commercial disputes, tax liabilities, and other known and unknown liabilities.

• Litigation or other claims in connection with the acquired company, including claims from terminated employees, customers, former stockholders, or other third parties.

Our failure to address these risks or other problems encountered in connection with our past or future acquisitions and investments could cause us to fail to realize the anticipated benefits of such acquisitions or investments, incur unanticipated liabilities, and harm our business generally.
Future acquisitions could also result in dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities, or amortization expenses, or write-offs of goodwill, any of which could harm our financial condition. Also, the anticipated benefit of many of our acquisitions may not materialize.

Nevertheless, it is this very risk which is the potential upon which it can advance its business considerably, reflecting the overall value of corporate acquisitions to rapid business advancement and off-setting the challenges imposed by internal inability to make the required progress and fending off the competition.