Hell yeah, robots!
Google has never been afraid of using its huge cash reserves (estimated to be in the region of $60 billion) to acquire new products and personnel. DoubleClick and AdMob, Google’s two big cash cows, were big-ticket acquisitions ($3.1 billion and $750 million respectively). YouTube was acquired for $1.65 billion. Motorola Mobility was acquired for $12.5 billion (though, as time goes by, it really does seems this deal was about patents, rather than getting into the hardware business).
Historically, though, almost all of these acquisitions have strengthened Google’s core offerings (search, advertising, maps, mobile). Over the last 12 months, however, there’s been a very distinct change in Google’s acquisitory habits. Google is still bulking up its core services, but it has also started acquiring companies and talent that, at best, are only tangentially linked to its current profit centers.
The most notable of these acquisitions was Nest Labs, a small hardware company that makes the Nest thermostat and Protect smoke detector, which was picked up for a hefty $3.2 billion. (Google’s second largest acquisition ever, ahead of DoubleClick and behind Motorola Mobility, if you’re keeping count.) Throughout December 2013, Google picked up eight of the world’s top robotics companies, including Boston Dynamics of Atlas and Alpha Dog fame, for undisclosed sums. Back in May 2013, Google picked up Makani Power, an airborne wind turbine power generation startup, for an undisclosed amount. Google has also picked up two big AI startups, DNNresearch ($undisclosed) and DeepMind (~$500 million), the purpose of which is currently unclear.
Which leads us neatly onto Google X. Almost all of Google’s recent acquisitions have been folded into Google X, where Google’s crack team of innovators and entrepreneurs, led by Google’s co-founder Sergey Brin, will try to turn the new-found tech and talent into money. Google X is a secret facility, situated about half a mile from the main Google campus that is working to develop “science fiction-sounding” technologies, which can then be turned into commercial products and solutions. Its most notable projects are Google’s self-driving car, and more recently Google Glass and a smart contact lens for diabetics that can measure your blood sugar level from your tears. Google X is reported to be working on around 100 projects, and it would seem that most of them are unrelated (or only tangentially connected) to Google’s current core businesses. In short, Google X is on the hunt for Google’s next billion-dollar business. The question on everyone’s lips, though, is what will that billion-dollar business be?
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