If you believe the adage that anything is for sale at the right price, does that apply to Google?
This scenario – however seemingly implausible – struck me after Microsoft unveiled plans to spend $44.5-billion to acquire Yahoo. That’s a whack of cash but it pales in comparison to the $158.5-billion it would take to acquire Google (not including a takeover premium).
Still, does that price tag make a deal for Google a complete impossibility? Is Google eternally off the market? What if someone, a company or a group of investors believed that Google was terribly under-valued based on the idea Google will be the dominant player in the booming online advertising market?
What if five years down the road, the New Microsoft – armed with Yahoo, sales of more than $80-billion, lots of cash and strong online operations – decided to do an AOL-Time Warner kind of deal? Could that fly? Would that be possible?
This is all just food for thought because, for one, Google’s controlling shareholders, Larry Page and Sergey Brin, are committed for the long-term. Who knows, maybe a few bad quarters will suddenly make Google affordable to the point where Rupert Murdoch or Barry Diller become curious.
More: According to the Wall St. Journal (sub. required), Yahoo is exploring alternatives to a deal with Microsoft that will let it remain independent. Frankly, that seems highly unlikely given the 60% premium that Microsoft is offering.
9 Comments
The short answer is no, and it has nothing to do with price.
Google has some very “interesting” clauses in it’s charter. Most importantly, certain shares have 10x the voting power than all the other shares, and those certain shares are owned by key people. No matter how much money you spend, you cannot buy enough of google to be able to vote the founders down.
As a corollary, google is actually not in any way obligated to pay it’s shareholders anything. Ever. It might, but it is all up to the will of the board. Which is guaranteed not to be changed, because the board has all the voting power.
Interesting that you mention a Time Warner – AOL kind of deal in reference in a possible takeover of Google by Microsoft in 5 years. The TW-AOL deal was an unalterated disaster from a business perspective and reflective of egos out of control with a poor business rationale for the transaction. If you actually think that a Microsoft Google deal makes sense, I would suggest another example…not that there is one readily apparent.
Technically, I’d imagine Berkshire Hathaway would be able to buy Google. Although it would never happen given the close ties between the Oracle of Omaha and Geeky Gates.
E Guy: I’m not sure a MSFT-Google makes sense or not. It was an example of who could, in theory, take a run at Google. As Jesse notes, Berkshire Hathaway could do it, and I suspect there are hedge funds and LBO experts who might be able to pull it off but the pool of potential buyers is pretty small – if it exists at all.
My point is that acquisitions of this magnitude are generally about egos and who has the biggest uh hmm…you know. Very few large scale acquisitions ever make sense…and it is all about who has or has access to the capital to make it happen creating a “disneyland” rationale along the way to justify the purchase.
In the end, the capital for these acquisitions can and should be used to create sustaining organizations with strategic insight and thought…instead of paying lawyers and investment bankers to fulfill the egotistical interests of the key players.
WHO’D WANT TO BUY IT?
Acquisition or not, the one thing we can count on are the big guys never innovate. It seems like once a tech company grows above 5,000 people or so, it just can’t build new products anymore.
We just have to hope a search startup comes around (much like Goog did in 1999) and shakes this market up.
I personally think ManagedQ has a pretty good shot. They’ve got a really interesting search solution that combines NLP with a cool user interface. Give it a whirl.
Search Google takeover possibility
Well, it could be possible. I mean everything falls after some time. So, maybe, as post said, Microsoft, could indeed acquire Yahoo (quite likely, actually) and may target Google. But for now, Yahoo is independent, Google is supreme and Microsoft is still trying.
i could buy google i have got £55.5 billion pounds so goolgle watch out
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