Google is closed at the core – making acquisitions tough to integrate

By July 17, 2008 2 Comments

As we know Google has a history of acquiring companies which then seem to disappear into the abyss – Dodgeball, Measuremap and Jaiku fall into that category and other services like Blogger, GrandCentral and Feedburner don’t seem to have progressed since they moved to new ownership.

There are a couple of exceptions – Youtube being the most notable and Jotspot was relaunched in February this year as Google Sites.

In this article on TechCrunchIT Nik Cubrilovic gives more detail on the acquistions that haven’t gone so well and explains that the reason is that Google runs on a proprietary software stack that it is tough for companies to port to.

Technology integration has always been challenging in M&A, and the problem is worse in consumer internet where you have to deal with an existing user base who loves the product the way it is.

As Google thinks about it’s M&A strategy in light of its success with earlier deals I wonder if they will start to focus on bigger transactions which will justify extensive effort in integration – as YouTube did.

Further, as one of the commenters pointed out the high mortaility rate for apps acquired by Google may deter potential target acquisitions.

Very small acquisitions which are mostly about acquiring people are, of course, a different kettle of fish.

The implication of this is that most get lost along the way, and that going forward they should focus