Google's $3.2 billion acquisition of Nest on Monday is a reminder of the company's penchant for bold decisions, but it also demonstrates a very different policy from Apple, a company that is increasingly risk-averse and growing.
Apple 's biggest purchase last year was Topsy, a Twitter analytics company that cost the company $200 million. Google's biggest acquisition in 2013 was Waze, an Israeli real-time traffic data company, which cost five times more than what Apple paid for Topsy . To acquire Waze , Google had to compete with other suitors, including reportedly Apple.
Nest , and the company's products feature a very sleek design aesthetic. However, Tony Fadell, founder and CEO of Nest, clearly doesn't have Apple's Jony Ive. Apple's approach to acquisitions to date has been to buy small and near-insignificant companies. This reflects the belief of Steve Jobs, who, as the story goes, bought companies that were one step away from defeat and the admission of failure.
It's hard to say that it still applies today, for example, Google bought YouTube for 1.600.000.000 dollars in 2006. Perhaps Google admitted that at the moment of the purchase it failed to predict the development of web‑based video, but eight years later, and with YouTube's success, who cares? If Google hadn't bought YouTube, probably some formidable competitor like Apple, or Facebook would have done it.
Let's see, however, Google's acquisitions:
- Motorola (11.5 bn USD)
- DoubleClick (3.1 bn USD)
- AdMob (750 million USD)
- ITA Travel ( $ 700 000 000 >
- Postini ( $ 624 million)
And here are Apple's:
- Anobit (390 million USD)
- AuthenTec ( 356 million dollars )
- PrimeSense (345 million USD)
- P.A Semi (278 million USD)
- C3 Technologies (267 million USD)
We observe and note that Motorola and ITA Travel helped Google enter new segments (hardware and travel, respectively), while Apple's acquisitions aimed to help the company fill gaps in its existing products and services . Topsy is a notable exception. That said, Apple has accelerated the pace of acquisitions – there were 15 in its tax filing for 2013. Almost the same number as Google, which bought 18 companies in 2013.
Apple's limited market strategy may make sense, especially if one considers that the company sits on a mountain of billions (the company earns three times Google's profits).
(See Mashable 's chart )
The amount is so large that it has no other option but to give some money back to investors. This is the strategy of a mature company, but this will not optimize growth.
