Feb 18th, 2010

Google have made a lot of high profile purchases over the past several years and that trend continues. While they’ve made HUGE acquisitions such as buying YouTube, you could easily argue that they’re interest in less recognized start-ups will play a larger role in the company’s future growth. Afterall, that’s exactly how Google Android got started in 2005 not to mention the advent of Google Voice.

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Although the high profile buyout speculations are fun to entertain – like Google buying Yelp – take a look at what Google has done recently. After buying Aardvark (social Q&A) for $50M last week, the Big G has already added the former company’s offering into Google Labs. Today, Google purchased reMail – an Email-based startup – and pulled their very popular application from the iPhone AppStore. Android enthusiasts HAVE to be excited about how Google will implement the new company’s knowledge/talent into GMail and inherently the Android GMail app.

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But it doesn’t stop there. The really interesting thing about these recent acquisitions is noted by Liz Gannes from GigaOM: many of these recent purchases (AppJet, Aardvark, reMail)  are companies started by former Google employees! The company is great at bringing in amazing talent – but sometimes that burning entrepreneurial sensation is too strong, despite Google’s liberal and open work policies (20% time), and financially stable and incredibly talented employees want to pour all their time and energy into something they can call their own. I don’t blame them.

Neither do I blame Google for recognizing the success of their former employees and bringing them back home to continue their accomplishments. It’s a tremendous move, and while some people may call it “eating their young”, I’m more inclined to consider it a college graduation slash family reunion with huge reward for graduating summa cum laude.

Rather than starting from scratch, acquisitions allow Google to enter a new field not only with a humongous head start, but also with a team of executives who are motivated and talented. Ask any angel investor – business plans and concepts are great and all, but the team BEHIND the product/service is equally important. Since Google is already familiar, comfortable and confident in their former employees they likely consider the deal less risky.

And it keeps going. One factor that makes this all the more interesting is Google’s boundless desire to enter new markets. Google is already disrupting “business as usual” in plenty of industries and many would say for the better – take Google Android and Google News for example. They’re trying to take libraries to the masses through Google Books and eReaders and now it seems the Music industry and iTunes might be next on Google’s “To Do” list.

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Word has it that Google is interested in buying L.A. based Catch Media – a company that “helps hardware companies and service providers register, track, route and clear digital media as it moves across different platforms.” Apple has recently been in talks with record labels about bringing free streaming services to the masses and CNET seems to think Google wants to keep pace. Nobody can deny that Google has been all about the cloud lately. Further details on Google and Apple in the music industry competition can be read in that CNET piece.

android-yankeeEntrepreneurship is a great thing… but so is competition. So where do Google and Apple stand in the minds of consumers as they pick up the purchase pace? Have they become the George Steinbrenners of business?

Not really. Google buying YouTube was a this-generation-New-York-Yankees-like move (or not). But if you ask me, purchasing these lesser known companies on the brink of possible breakout success is more like keeping your farm team stocked with talent at all times. As a Baltimore Ravens fan, I appreciate the ability of the team’s front office to recognize top-tier talent/potential in the NFL draft and get their picks signed. Google is doing the same thing.

Before you get all antsy and argue that Google is taking over the world, think about how quickly competition can change and understand that Google is trying to stay one-step ahead, constantly thinking about what consumers will want tomorrow instead of only trying to provide them with what they want today. The inability to think in this manner is EXACTLY the reason that social networking giant MySpace has faltered, purchased streaming music star prospect iMeem, and is still on the brink of becoming the next Friendster.