A120 was never considered important to google innovation strategy.
In fact what did it accomplish for the business. Google would have a better roi giving the money to Google Ventures or a16z. Or starting a private equity like firm adding notable startups to the alphabet portfolio.
Interesting because according to crunchbase their $6M round with a16z was at a $22M Val. With a follow on debt financing, that indicates to me that they might have taken a down acquisition. Of course that was 2+ years ago. So if it was a 20M acquisition that means that the last two years of growth [2] wasn't good enough.
It's possible that Google simply couldn't afford them anymore. At these unicorns they are leading, their current and projected net worth is so huge that even a company like Google might not be able to justify paying it without serious disruption.
I always thought that's what Alphabet was for, to be honest. Trying to keep a sort of ecosystem of acquisitions and Google spin-off startups with direct Google investment.
Maybe this just looked like a good idea to Google at the time. Sometimes you have to make acquisitions to look progressive to your shareholders. Now, I'm betting they're glad they didn't make this purchase.
I used to think that mattered, but I’m not so sure any more. After all the people that developed that product became part of Google, and they didn’t become any less the innovators of it as a result.
I think what matters with an acquisition is how it’s managed and how the technology is developed. I think it’s unarguable Google has put significant investment into docs and done a good job developing the product so I have no problem at this point giving them credit for it.
Arguably this helped startups, since an ex Apple guy who couldn't go to Google could found a startup (and then maybe sell to Google later). Still lame though.
Why are you convinced that this was a "bail out"? Why is it unsavory if Google thought that the team and its expertise was worth $200M? Google clearly was trying to get into social at the time, and this team did have a lot of interesting ideas in that space. Plus it seems that most of them are sticking around.
You seem to be attaching a lot of motivation behind the acquisition that I haven't seen elsewhere.
Why would Google make this acquisition if there was no value in the product, if they intended to do nothing similar, if they could make no use of the work done to date, of the outcome of the experiment, of the experience of the team?
They wouldn't. Google just acquired the leading experts at monetizing search on the iPhone. Can't you see the value in that for Google from many angles?
Everything Google does has to fit Google's scale - and that is at odds with architecting a product at a startup. So you rewrite it, you get the new DNA incorporated into existing product lines, and you move forward.
>To me the lesson of Google is early profitability gives you immense leverage with VCs.
But Google didn't have profits in June 1999. They were hoping for VCs Mike Moritz @ Sequoia and John Doerr @ KPCB to bring them revenue because those 2 partners were on the boards of AOL and Yahoo. They wanted to try and sell their tech to those companies. (They eventually did do deals with both of them.)
Later interviews with angel Ron Conway and Sequoia said Larry's slidedeck for investment didn't have a revenue plan.
The "leverage" that Larry & Sergei had was that their search engine worked better than competitors such as AltaVista and Yahoo.
Agree, and given the standard "liquidity preference", the founders are likely to net $0, except for the Google bonuses for the engineering (Jack Barker-like Rosenthal is not likely to stick there).
It's sad, really. It's one of the really innovative companies, but it's not easy to sell tech ahead of its time. Yet another incident that will encourage to pick copycats over real innovation.
I guess Google is no longer as generous with the acquisitions.
I think the article is interesting but mostly stating the obvious: Projects that do not make money and aren't able to garner a top spot in their sector/niche get killed. What I would find much more interesting is an article how Google chooses the companies it buys.
In fact what did it accomplish for the business. Google would have a better roi giving the money to Google Ventures or a16z. Or starting a private equity like firm adding notable startups to the alphabet portfolio.
A120 was a sinking ship for a while
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