14 DAY TRIAL // Google CEO Eric Schmidt and cofounder Sergey Brin spoke at a press conference in New York earlier touching on most aspects of the company and some of the more pressing issues like Google Books and Google Chrome. The company's economic state also came under scrutiny. Google has weathered the economic downturn better than most companies, especially at that size, but this doesn't mean that it wasn't affected. However, the company is reinforcing the idea that the worst is behind and that it is seeing stronger growth and has started spending and hiring at an accelerated pace.
“The worst is behind us. We’re clearly seeing aspects of recovery, not just in the U.S. but also in Europe,” Schmidt said regarding the company's economic health. He added that the low point was somewhere in late spring but the company has been recovering since and has been increasing spending and hiring. However, he believes that Google as a company may not be an entirely accurate model for the economy as a whole and as such couldn't make any broader claims based on Google's successes. Brin added that Google was a model for the advertising market, though.
With the statement that Google will start spending more and hiring but also start acquiring tech companies again came the obvious question of what type of companies the search giant would focus on and how many. Schmidt has said before that Google will resume its one acquisition per month schedule and has now detailed the claim.
“That was our historic average…I think it’s going to be small companies of five to 10 people. Half of the most interesting things at Google came from small companies. When Larry and Sergey bought Android I didn’t even notice,” Schmidt said. “Sergey was surfing on the Web one day and came across what became Google Earth. He came in my office and said ‘I bought them.’ I said, ‘For what price?’ It was a small number so I said OK,” he added.
When questioned whether there would be larger acquisitions like YouTube, which Google bought in 2006 for $1.65 billion, a figure that was a big premium over the company's estimated worth, Schmidt didn't outright dismiss the idea but pointed out that buying a company at that level opens up a big set of problems. The most obvious one is that it has to pay out in the long run, something Google has been struggling with for YouTube but also for DoubleClick, the advertising network it bought for $3.1 billion in 2007, greatly above the company's estimated worth at the time. There are also bound to be issues with anti-trust concerns and any acquisition at that price level would most certainly see a lot of scrutiny from the government. Still, if the right opportunity were to arrive Google may consider such an acquisition.