Net giants predicted to go on buying spree

Bambi Francisco Roizen · February 17, 2010 · Short URL:

Google, Microsoft, Apple, Amazon, eBay, Yahoo have north of $50 billion in cash

With the recession behind us, the big, deep-pocketed Internet giants are expected to be actively snapping up companies this year. Indeed, Google already kicked off the year in a buying mood with its $50 million acquisition of social Q&A site, Aardvark. 

"A year ago they stopped all acquisitions," said Mark Mahaney, Internet analyst at Citi Investment Research, referring to the publicly-traded Internet companies, Google, Yahoo, eBay and Amazon. "Now that we're out of the recession.. and now that they're looking for new growth opportunities, you bet there's going to be a pick-up in M&A activity, and those are the four obvious."

Mark points out that Google has $14 bln to $15 billion in cash, eBay has $5 billion, Amazon has $2 bln to $3 bln and Yahoo has $3 bln to $4 billion. Add in Microsoft and Apple's stockpile and there's north of $50 billion in cash looking for secular growth opportunities.

Already we've seen some major acquisitions happening in the last several months, a good indicator of activity in the new year. Amazon's acquisition of Zappos closed in November 2009. (Note: Watch for my interview with Zappos Alfred Lin - coming soon). Google bought AdMob for $750 million in stock in November, and was reportedly interested in buying Yelp, in mid-December. Apple bought Quattro Wireless for $275 million in January.

Mark predicts we'll see more consolidation in these areas - smart phone, ecommerce, mobile advertising and local.


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Bambi Francisco Roizen

Founder and CEO of Vator, a media and research firm for entrepreneurs and investors; Managing Director of Vator Health Fund; Co-Founder of Invent Health; Author and award-winning journalist.

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Our goal is to position Zappos as the online service leader. If we can get customers to associate the brand with the absolute best service, then we can expand into other product categories beyond shoes. And, we're doing just that.

Internally, we have a saying: We are a service company that happens to sell ________.

  • shoes
  • and handbags
  • and clothing
  • and eyewear
  • and watches
  • and accessories
  • (and eventually anything and everything)

Mark Mahaney

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