In 2014 alone, Google has already made upward of 20 acquisitions.
According $4, CEO Larry Page uses the "toothbrush test" to determine whether a company is worth buying. He'll ask, "Is this something you will use once or twice a day, and does it make your life better?"
Instead of diving into the nitty-gritty of cash flow and earnings, Page cares about usefulness and long-term investment and benefits. Nest might not be reeling in a ton of money right now, but Google sees it as an entry point to a $4. Nest's smart thermostats and smoke detectors use complex tech to solve simple problems that people have on an everyday basis. Toothbrush test: Passed.
Like many other tech companies, Grauman points out, Google doesn't depend as frequently on big banks to decide whether a major merger or acquisition is worth it.
"Larry will look at potential deals at a very early stage," Google's VP of corporate development, Donald Harrison, told Grauman. "Bankers can be helpful, but they're not necessarily core to the discussions."
Once Google does acquire a company, it works hard to integrate it into the "Googley" culture while still leaving room for autonomy. Nest, for example, still has $4 and doesn't share its data with its parent company.
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