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Understanding Alphabet’s Acquisitions: 

A Sector-By-Sector Analysis


Google has made nearly 200 acquisitions since 2001. When the company reorganized as a new entity called Alphabet in late 2015, the new structure refocused attention on Google’s non-advertising businesses, including Calico (healthcare), Google X (self-driving cars , robots, etc.), and Nest (smart home), all of which now effectively operate as their own divisions.


We analyzed some of the sectors outside search and digital advertising where Alphabet has made recent acquisitions:


MEDIA AND ENTERTAINMENT


Google paid $1.7B for YouTube in 2006 in what is widely regarded as one of the most important consumer tech acquisitions of all time. Since then, Google has acquired more video-related companies whose technologies were absorbed into YouTube, including an easy-to-use video-creation tool (Directr), video-rendering tech (Zync), and social video software (Omnisio).


More recently, YouTube has signaled its interest in content, acquiring Next New Networks in 2011 (it became YouTube’s Next Lab to scout talent) and Vidmaker (a kind of Google docs for video editing, used by semi-professional and professional video creators). The rollout of YouTube Red, an ad-free subscription-based version of YouTube, could point to more content-related acquisitions if the model succeeds.


VR is another area of interest for Google. The company acquired Skillman & Hackett, which makes software that allows users to “paint” in virtual reality environments, and also acquired the team from Thrive Audio, which specializes in “positional audio” which will be key for adding a soundtrack to immersive VR experiences. Digisfera, a company that specializes in 360-degree imaging, has use cases in Google’s mapping projects, but could also be useful since 360-degree images are also used in VR content (YouTube has already 360-degree video support for VR enthusiasts).


AUTO TECH AND NAVIGATION 


The two fields are interrelated, with Google’s market-leading maps giving the giant a good footing in the race to build autonomous vehicles. Several of Google’s acquisitions helped make Google Maps and its underlying data more robust, including companies focused on satellites (Skybox Imaging) and crowdsourced traffic data (Waze). Google also acquired Lumedyne, a company that creates microsensors, which could be used in various car parts that could help power and refine self-driving cars.


ROBOTICS 


Alphabet made more than 7 robotics acquisitions in 2013 as the company continues to make serious forays into the space including a recently filed patents for controlling large groups of robots and creating downloadable personalities. The robotics companies that were acquired develop machines for a wide set of use cases. Boston Dynamics has developed a robotic cheetah, Industrial Perception’s robots are designed to locate objects and move them in warehouse environments, and Bot & Dolly develops robots to assist in filmmaking.


SMART HOME


Google's largest acquisition ever was for Nest in 2014 for $3.2B, and now operates as one of Alphabet’s divisions under Tony Fadell. The company has made other acquisitions to bolster its home offerings, including Dropcam for home security and Revolv, a smart home hub. While the Revolv product was discontinued, the team helped develop Google’s OnHub, a centralized Wi-Fi and Smart Home device. Alphabet also acquired Flutter, a gesture-recognition company, which would allow for new, convenient ways for consumers to control smart home devices (Project Soli is already using gesture-recognition in really interesting ways).


COMMERCE


Since 2011, Alphabet has bought more than 15 companies involved with powering commerce and small businesses. Many acquisitions helped build “Google Shopping”, which is the company’s foray into ecommerce, and “Google Express”, a gigantic logistics endeavor for product delivery. Google also bought Rangespan and Channel Intelligence, both designed to use data to help businesses sell their goods online. In the past, the company has also purchased daily deals sites (DailyDeal, The Dealmap), targeted coupons (Incentive Targeting, Zave Networks), and loyalty programs (Punchd).


GOOGLE FOR ENTERPRISE/PRODUCTIVITY


Alphabet has several productivity products aimed at least in part at enterprises, including Drive, Hangouts, and Docs. Many of the acquisitions were early (pre-2011) and helped these products come into being, including Urchin Software (acquired in 2005), which became Google Analytics, and Writely (acquired in 2006), which fed into documents. Virtual assistants like Google Now might be enhanced through the recent acquisitions of Timeful (artificial intelligence) and Emu (natural language processing), technologies that could help create smart scheduling features. Alphabet could also be trying to enter the mobile enterprise market with the acquisition of Divide, a company that allows employees to carry a single phone with a “work” mode and “personal” mode.


CLOUD


Google has also made acquisitions to bolster its Google Cloud Platform and help it compete effectively for users and app deployments with Amazon’s AWS Microsoft’s Azure, and other providers. In 2014, Google made 4 acquisitions on this front in the form of Stackdriver, Appurify, Zync Render, and Firebase.


HEALTHCARE


While Google is heavily involved in healthcare through Google X, Calico, and its Life Sciences division, the company has made few disclosed healthcare acquisitions. The most recent was Lift Labs, a company that has developed a stabilizing spoon for people with neurodegenerative disorders like Parkinsons.


Healthcare is also a major investment area for the company's venture arm, Google Ventures. They've invested in several different areas of healthcare, including insurance (Oscar), big data (Flatiron Health), and genomics (23andMe).


PAYMENTS


Google announced Android Pay almost directly after Apple announced Apple Pay. Google’s most notable payments acquisition was Softcard, a contactless NFC based mobile payments solution. originally a joint venture between AT&T, Verizon, and T-Mobile. In exchange, the carriers have agreed to pre-install Google payment apps on their phones. However, it’s unclear whether the platform has gained any traction. Google has also invested in other areas of fintech, including digital currency, crowdfunding, and more recently insurance.


TELECOMMUNICATIONS


Alphabet has become directly involved in cell and internet services through projects like Project Fi, Google Fiber, and Project Loon. Google also bought satellite company Skybox Imaging and high-altitude drone company Titan Aerospace. Both are acquisitions that could have possible ramifications for providing connectivity to developing countries, without the need for expensive and logistically complex submarine or terrestrial infrastructure.





CB Insights