Search engine giant Google (GOOG, Financial) recently completed a decade as a public company and during those years underwent a lot of changes while expanding into diverse fields. Investors have witnessed Google’s journey from being just a search tool over the web to a provider of android app, advertising solutions, mobile phones, navigation solutions, cloud storage solutions and many more. And such a wide exposure was possible due to huge investments in the form of acquisitions.
So far this year
Since IPO, Google has acquired almost 145 companies spending roughly $23 billion, reports data analytics firm FactSet. And so far this year, it has gobbled up 20-plus companies spending more than $5 billion. Not only has Google amassed a gigantic cash balance of $61.2 billion, it also has strong cash flow generation abilities, showing its spending capacity.
The company has always been the frontrunner in broadening its services and strengthening its revenue generation capabilities. It has already covered areas like drones to video advertising with smaller acquisitions this year.
The journey’s still on and that’s evident from the tech giant’s latest acquisition.
Gecko acquisition
Last week, Google picked up engineering and product design company Gecko Design Inc. for an undisclosed amount. California-based Gecko is an 18-year old tech startup specialized in developing designs for consumer electronics. Gecko formulated product designs for high-end companies including Dell, Hewlett-Packard (HPQ, Financial), Logitech and FitBit.
Google will add Gecko’s capabilities to its Google X unit, which conducts research on the company’s technological advancements. The five member team including Gecko’s president Jacques Gagné will join the internet giant’s research lab.
Why Gecko?
When interviewed by the Wall Street Journal, Jacques Gagné, Gecko’s founder, said:
“People come to Gecko because they don't know how to turn ideas into real products, especially when it's something that hasn't been done before. That's what attracted Google X”.
Gecko’s expertise helps the product development teams in understanding complex mechanical engineering of production and completing the product development cycle well ahead of time, thereby lowering cost of production. Notably, Gecko was closely associated with "one laptop per child" project that involved designing cheap and hardy computers for kids in developing countries.
Google has moved a long way from being a software company and is expanding its wings in consumer-oriented devices. It has made forays into autos, mobile gadgets, home media devices and wearable devices. No wonder that the internet king would require support of companies with rich experiences in product designs. The company has already hired some design experts for Google X and opted for Gecko’s input for a project in 2013. Although the companies didn’t disclose anything about the project, Gecko’s chief stated that the acquisition talks started in early 2014.
The list of major projects that has been developed in Google X includes self-driving cars, connected eyewear (Google Glass), smart contact lens (Iris), internet service for remote areas (project Loon). Although Google didn’t specify the project Gecko will work on, there’s no doubting the fact that Google could take bold steps in making its consumer-centric products look better.
Summing up
Google has always mesmerized its customers with innovative offerings and made investors happy with improved returns. Its continuous investments in new technologies and inclusion of newer capabilities have been reflected in the company’s business growth. The list of successful acquisitions is growing, and it’s expected that Gecko would make the list longer.
