Google makes its biggest acquisition since 2014 - TechCentral

Google makes its biggest acquisition since 2014

Google has agreed to buy Looker Data Sciences for US$2.6-billion, expanding its offerings to help customers manage data in the cloud.

The acquisition announced on Thursday gives Google a new tool in its campaign to sell more cloud storage and software. So far, the company has struggled to compete with larger rivals Amazon.com and Microsoft and late last year Google replaced its head of cloud, Diane Greene, with longtime Oracle executive Thomas Kurian.

Looker, based in Santa Cruz, California, helps companies visualise and analyse the data they store in the cloud. The deal is Google’s biggest since it acquired smart-home company Nest Labs for $3.2-billion in 2014. Any deal-making by Google now will get a close look by regulators, since the company is facing an antitrust investigation by the US justice department. But analysts’ initial reaction is that the anticompetitive threat isn’t high in this domain. Google shares were down less than 1%.

“I think it will get scrutiny because these are complicated businesses and there is so much sensitivity around small acquisitions by the big tech companies,” said Jennifer Rie, an analyst with Bloomberg Intelligence. However, Rie said she doesn’t think owning Looker will “disadvantage any other competitors or have any real potential for harm. I do think the regulators will take a close look, however.”

Cloud is important for Google because growth is slowing in its core search advertising business. Google already has analytics tools, but the company noticed many of its customers were also using Looker, Kurian said in an interview.

“Looker complemented the Google Cloud analytics foundation,” he said. Google doesn’t plan to cut off Looker from working with its competitors, because many of its customers use more than one cloud, Kurian said. Working with other cloud systems is a critical part of Google’s overall strategy, he said.

Refocusing

Kurian has been concentrating on hiring new salespeople and refocusing Google’s cloud efforts on several key industries. Investors and analysts have repeatedly asked when the company will do a major acquisition to boost its presence in the space.

“Many people have asked us for many months, ‘Are you rushing to do acquisitions?”’ Kurian said. “We’ve been very disciplined in building our sales and go-to-market capability, and our own products. We’ve chosen Looker as a very complementary technology that a lot of customers will find value in very quickly.”

The two companies already share more than 350 joint customers, including BuzzFeed, Hearst, King, Sunrun, WPP Essence and Yahoo. The acquisition of Looker is expected to be completed later this year, subject to regulatory approval.

Charlotte Slaiman, policy counsel for consumer advocacy group Public Knowledge, said Google probably realises it’s under the microscope on any M&A deals, but the Looker purchase seems to be a “vertical merger”, which are harder for antitrust authorities to block. “But there still might be real concerns,” she said.

Looker’s investors include Kleiner Perkins Caufield & Byers, Meritech Capital Partners, Premji Invest, Redpoint Ventures and Goldman Sachs Group. The company was valued at $1.6-billion after a venture capital investment late last year, according to data firm Pitchbook. — Reported by Gerrit De Vynck, with assistance from Naomi Nix, (c) 2019 Bloomberg LP

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