During the DEMO Conference a few weeks back, Google announced its acquisition of Pyra Labs, the makers of Blogger. Since everything Google does these days results in a pile of buzz, it is no surprise that the acquisition was the talk of DEMO for much of the day. And during that day there was a panel of luminaries, including Dan Bricklin, Founder & CTO, Trellix Corporation, Mitch Kapor, Chair, Open Source Applications Foundation, John Patrick, President, Attitude LLC and Les Vadasz, Executive VP, President, Intel Capital, Intel Corporation (Les has the distinction of being the only person to have attend every DEMO conference -- he noted that this was the first one in which they had gotten him the right size shirt -- I myself ended up with a shirt the size of a small boat sail). The panelists spoke with confidence of the continuing vibrancy of the technology world (which was a general theme of the conference as a whole -- the technology world is starting to feel better; not great, but better).
During a question and answer period, the panelists were asked an interesting question. A conference attendee asked if they thought that "Google was the next Microsoft" with respect to being the serial acquirer-of-choice in the technology world. I frankly don't recall the panelists' answer but it struck me as a very interesting observation. There are so few potential acquirers out there these days with sufficiently valuable currency as to make an acquisition proposal particularly compelling. Even Microsoft, while maintaining a very stable currency for acquisitions, can no longer claim the sort of stock performance that made nearly every acquisition in the 90's worth well more than the price actually paid by Microsoft at the time of purchase. With speculation abounding, Google is using the wild optimism of many, to its great advantage as it acquires interesting technology companies. In what feels to me like the last of the bubble companies, Google is getting more value out of its illiquid currency than many large profitable companies with liquid stocks (or even cash) are able.
So, is Google the next Microsoft when it comes to acquisitions? It may be for the time being. As long as Google is able to leverage the immense buzz around the company, it will be able to continue to court potential acquisition targets with the promise of untold (and presently unmeasurable) value. This may be one of the reasons Google has chosen to not yet go public -- I suspect when the market starts to price Google, while it may be accorded an extraordinary initial value, it will not be able to maintain the promise of exponential growth that fueled the acquisition machine of Microsoft (and many other technology powerhouses during the late '90s).