Apple's Evolving Corporate Acquisition Strategy Examined

[dlastmango]

apple's motto

With $40B in the bank, it's easier to buy and integrate, then develop from scratch.

Remember when Apple's slogan was "Think Different"

today it should be "if we cant think different... We'll buy your @$$"

I am really liking Apple less and less these days..

 

[roocka]

If Apple could 'quickly' develop a search that could compete with Google they would have already done it. In fact, many companies would have done it in order to try and get a cut of the large amounts of money Google rakes in. Problem is that it's not easy and it couldn't happen quickly. Apple would always be playing catch up (you think Google is standing still?) and they already have resource issues to think about.

There is a rumor floating around that Apple will buy LOOKSMART which is a pay per click advertising model company that was thought to be a Google-killer back in the day after they purchased a company called Wisenut. Looksmart has since sold Wisenut but retained all the intellectual property from the sale so Apple could in fact start a company for maybe $100 million or $200 million very quickly that would be the default search provider on every Apple device. This would hurt Google immediately.

 

[mr.steevo]

Hi,

I wonder if Jobs is kicking himself for not acquiring Gizmodo two months ago?

s.

 

[deconstruct60]

What's hilarious is the hypocrisy on these boards. Apple can (and should?) move at lightning speed but Google should just standby while Apple is lollygagging in its preparation to purchase Admob? What a joke.

3 hrs is not "lightning speed". That shakedown by the local enforcer speed.
Unless talking about a company that is a sole proprietor that's is barely enough time to read through the terms (let alone have your lawyer look them over) and get all of the major shareholders/directors on the phone.

Maybe 3hrs to perhaps agree to a "lockout" period where Apple is the only serious bidder. If it is short enough period that would be OK; can always protract the due diligence to end the period. That isn't 3 hrs to "close" or to a finished deal, that is 3 hrs to decide if want to dance or not.

 

[mdatwood]

There is a rumor floating around that Apple will buy LOOKSMART which is a pay per click advertising model company that was thought to be a Google-killer back in the day after they purchased a company called Wisenut. Looksmart has since sold Wisenut but retained all the intellectual property from the sale so Apple could in fact start a company for maybe $100 million or $200 million very quickly that would be the default search provider on every Apple device. This would hurt Google immediately.

So if Looksmart is the Google killer why haven't they killed them yet? Lots of Google killers have come and gone. I love how people think building a search engine like Google is so easy LOL.

Additionally, buying a search engine would be a complete waste for Apple since they would be fighting so much inertia with Google. People equate search with Google the same way people equate mp3 players with iPods. Apple could try to push their own search engine using their devices, but many people would just switch back to Google the first time they can't find something. This also ignores all the other services that Google offers and many people use from their i* devices.

 

[deconstruct60]

....in fact start a company for maybe $100 million or $200 million very quickly that would be the default search provider on every Apple device. This would hurt Google immediately.

What?????? You go from "click ad" company to search provider. As a search provider you need to make a copy of the whole internet. Apple has NOTHING on that scale.

The still need a real search engine company and it somewhat dubious to go out and replicate what Microsoft and Google have (spread over more than handfull of datacenters ).

Besides banner search ads have problems on small screen devices because the ads are pushed to the bottom of the screen where most folks don't look. There is "big money" in that. Apple already has an ad company and can stick banners with them. What's 'new' with these LOOK folks? Especially $100M 'new'.

 

[ValSalva]

Apple should quickly develop an "isearch" and put Google out of business before they take over the world.... Seriously, There is not a more diabolical company not run by Chavez, Putin, or Beijing.

It's amazing what Google has done. They've set up a business where they essentially print money. It's all based on ads. Yet I can't think of one instance where I've purchased anything based on any Google ad.

 

[JonboyDC]

I don't think either company is looking to invade the other's core business. Google's not going to start selling computers, and Apple is not going to develop a search engine. Where they are in conflict is in the newly developing cloud of apps, sites, and services that define the user experience to a greater and greater degree. If Apple wants to maintain its supremacy in mobile hardware, it needs to develop more and more ways for its devices to access that cloud, in ways that are better than anything offered by its rivals. And since Google's basic business strategy is to give away free services in order to attract eyeballs to ads, they need to develop more and better services that users will want to use instead of the services offered by other companies. And there's going to be significant overlap between the things the two companies want to develop to enhance their core business, which is where they will be in conflict.

 

[Aputech]

If you look at the yahoo message boards, there is a rumor that started on Friday that Apple may be purchasing a company called LOOK to compete against Google in search. The purpose probably wouldn't be specifically to compete with Google or the Microsoft/Yahoo partnership but rather to derail Google's aspirations of world domination by forcing Google to focus on it's bread and butter which is search. Considering Google makes 95% of its money from it's search platform and that is what allows it to compete with Apple in mobile phones, with Microsoft in the cloud and to grow into new directions ie: Google TV, Apple entering into search and putting the new search browser (isearch.com) the default search provider on every i-Pod touch, i-Phone, i-Pad and Mac computer will give them an instant presence in the market. Think about it, if Apple takes only 1% of search from Google based on it being the default provider to their (Apple devices), Google's stock would plummet because it would be readily apparent that Google's growth story is over.. This is something they must do to kill Google. This is a David vs. Goliath battle but Goliath is going to win this round. Go Apple.

Oh, and here is a link to the story that started all the rumors. It is a very interesting article. Read it... Oh, and for all you haters, Apple could probably buy Looksmart.com (LOOK) for $100 million which is pocket change.

Would Apple look smart to enter the online search fray?

http://seekingalpha.com/article/202015-would-apple-look-smart-to-enter-online-search-fray

Reading that article made me think twice about it all. Thanks, man.

 

[roocka]

So if Looksmart is the Google killer why haven't they killed them yet? Lots of Google killers have come and gone. I love how people think building a search engine like Google is so easy LOL.

Additionally, buying a search engine would be a complete waste for Apple since they would be fighting so much inertia with Google. People equate search with Google the same way people equate mp3 players with iPods. Apple could try to push their own search engine using their devices, but many people would just switch back to Google the first time they can't find something. This also ignores all the other services that Google offers and many people use from their i* devices.

Before you comment, you should do some research. Looksmart was a tech company that did pay per click advertising and IPO'd back in 1999 right before the tech bubble popped. All the other companies like them merged with other companies to stay alive. They remained independent and are still alive.

Wisenut was thought to be a Google killer back in 2003-2004. It ended up not killing Google, but that's not to say that it wasn't a good search engine. As a matter of fact, a lot of search engines including Google emulate some of Wisenut's model in search.

 

[roocka]

What?????? You go from "click ad" company to search provider. As a search provider you need to make a copy of the whole internet. Apple has NOTHING on that scale.

The still need a real search engine company and it somewhat dubious to go out and replicate what Microsoft and Google have (spread over more than handfull of datacenters ).

Besides banner search ads have problems on small screen devices because the ads are pushed to the bottom of the screen where most folks don't look. There is "big money" in that. Apple already has an ad company and can stick banners with them. What's 'new' with these LOOK folks? Especially $100M 'new'.

Looksmart is the pay per click advertising company. They own all the intellectual property behind the company wisenut.com which was a search company. If Apple were to develop a search engine, it would be to generate revenue on a pay per click advertising model and to disrupt Google. Looksmart is the only INDEPENDENT company that can provide both at a very low cost which means LOW RISK.

Also, it is located just 40 miles from Apple headquarters and only has 69 employees so they are a lean company. Before you dispute my opinions, educate yourself a little bit.

 

[roocka]

I don't think either company is looking to invade the other's core business. Google's not going to start selling computers, and Apple is not going to develop a search engine. Where they are in conflict is in the newly developing cloud of apps, sites, and services that define the user experience to a greater and greater degree. If Apple wants to maintain its supremacy in mobile hardware, it needs to develop more and more ways for its devices to access that cloud, in ways that are better than anything offered by its rivals. And since Google's basic business strategy is to give away free services in order to attract eyeballs to ads, they need to develop more and better services that users will want to use instead of the services offered by other companies. And there's going to be significant overlap between the things the two companies want to develop to enhance their core business, which is where they will be in conflict.

There are two ways to win a war. In one method, you fight and fight and fight and fight and it takes a lot of work and leads to many casualties on both sides. This is the (fight hard) method.

The other method is to fight smart. Instead of fighting the troops, you disrupt their shipments of food and effectively starve them causing them to surrender. This method only leads to casualties to one army or at the very least, reduced casualties. This is the (fight smart) method.

Apple doesn't need to develop every new technology to stay ahead of the pack. What they need to do is disrupt Google's primary business model (search) w/ pay per click advertising and use the scale of all their devices. This will put Google into a defensive posture and will prevent Google from competing as effectively because it will be the first real threat to Google search since Google search was unleashed upon the world.

 

[ValSalva]

Google envy is a bad thing to have. It almost crippled Microsoft. Now Apple seems to have the Google envy. It's all to easy to lose focus chasing Google. Apple had better not neglect is core business (Macs) or they may find themselves holding an empty bag in a few years.

 

[deconstruct60]

It's amazing what Google has done. They've set up a business where they essentially print money. It's all based on ads. Yet I can't think of one instance where I've purchased anything based on any Google ad.

You have watched betwork television haven't you ???? Very similar business model. Ads == revenue. That's been working since the 1950's.

 

[theheadguy]

...Think about it, if Apple takes only 1% of search from Google based on it being the default provider to their (Apple devices), Google's stock would plummet because it would be readily apparent that Google's growth story is over.. This is something they must do to kill Google. This is a David vs. Goliath battle but Goliath is going to win this round. Go Apple.

I see your point, and I think it's a good one... but at the same time I think it is a bit rushed. It's not that simple.

Google has built a name for itself, so much so that it has turned the very company name into a verb (we don't 'Apple' or 'Mac' anything). I seriously doubt that Google will be killed because the "default" search provider on the iWhatevers is the new iSearch.

Even if Apple did do that, I would set the provider immediately back to Google; just like I would do if the default provider was set to Bing.

So Apple bringing down Google by setting a different default search provider-- sounds like a load of fanciful fiction, but a good story nonetheless.

 

[deconstruct60]

Looksmart is the pay per click advertising company. They own all the intellectual property behind the company wisenut.com which was a search company. If Apple were to develop a search engine,

That last bit is the central and critical flaw. Reportedly Apple gets PAID to allow default search placement. Not only will Apple have to pay millions to replicate what Microsoft and Google already have they will loose that income stream. Apple could go out and create their own electric company too. They got billions and will consume lots of power. They don't because they can more effectively buy power from someone who provides that basic utility.

The search engine is a basic utility. Don't care what IP some company has lying around that is NOT an operational search engine.

Apple has an Ad company. What do they need another one for ?
Apple gets paid to let folks search on their devices. That is an even more minuscule investment (put the search hook) for profits.




Google is in the phone business in part because folks were not creating an Open mobile platform that had legs. If someone had been they probably wouldn't have jumped in. Google wants folks on the internet and preferably not through some single vendor who can cut off the spigot. Minus Android the trend was going iPhoneOS , RIM (maybe WebOS) direction and that isn't really good from Google's philosophy. Microsoft chased off some of the key folks from Danger (sidekick) and Google picked them up.



Makes no sense for Apple to charge after search. Search is just a mechanism to get page views (i.e., eyeballs) . Apple can get page views by sticking ads in applications since most developers can't make substantive reoccuring income streams from apps. As much as folks search with Google/Bing Apple still gets a peace of that action too. To map back to the more mainstream ad world. Some companies own roadside billboards. Some companies own magazines you place ads inside of. Some folks put ads on TV.

 

[RT2020]

Apple should quickly develop an "isearch" and put Google out of business before they take over the world.... Seriously, There is not a more diabolical company not run by Chavez, Putin, or Beijing.

What would that search be like? It would give you 5 dumb-down results maximum. Only those results that have been approved by Apple. And it would cost $0.10 per search result. Oh yeah and lots of drop shadows, chrome, and eye candy.

No thanks... Google is under no threat from Apple.

 

[roocka]

I see your point, and I think it's a good one... but at the same time I think it is a bit rushed. It's not that simple.

Google has built a name for itself, so much so that it has turned the very company name into a verb (we don't 'Apple' or 'Mac' anything). I seriously doubt that Google will be killed because the "default" search provider on the iWhatevers is the new iSearch.

Even if Apple did do that, I would set the provider immediately back to Google; just like I would do if the default provider was set to Bing.

So Apple bringing down Google by setting a different default search provider-- sounds like a load of fanciful fiction, but a good story nonetheless.

I agree this won't kill Google. It would just force them to focus on the threats to their primary source of revenues which would be a HUGE help and benefit to Apple. Slow the competition to protect your lead.

As per you stating that you'd change the default search back to Google, that's fine. I don't like the way Google has approached its business by backstabbing Apple and getting into the mobile game like it has. I am an Apple stockholder and therefore try to use Google as little as possible if at all. Apple never does anything half ass. Therefore, I would have to believe that when Apple does enter the search foray, that they will do it right.

 

[mdatwood]

Wisenut was thought to be a Google killer back in 2003-2004. It ended up not killing Google, but that's not to say that it wasn't a good search engine. As a matter of fact, a lot of search engines including Google emulate some of Wisenut's model in search.

I wouldn't put much stock in what Wisenut had back '03-'04. ~7 years ago is a long time in technology. Even the articles that support what you're saying all say that Google had already emulated whatever Wisenut had back then. I would wager they passed it long ago.

Here's the thing that makes me think search is out for Apple. They are great at making consumer electronics that just work. What can Apple do to improve on search right now? Do they need to own a search company to do any of the things can want to do to improve on searching? Search is all about finding what you're looking for in the fewest number of steps. Apple would probably be better served by simply putting an eye candy filled UI over Google rather than buying their own search engine and playing catch up.

Also, why would Apple really want to deal with any part of the hard stuff (indexing/searching/etc...) when they already are putting in place the easier stuff where they can make money like iAd?

I checked out LOOK and it's a sub $5 stock that's up 15% today on this rumor. Stuff like that always makes me suspicious of pump and dumps.

 

[roocka]

Looksmart is a penny stock. That is correct. If you know how to do any technical analysis and charting, you'll see that the 50 day SMA just crossed the 200 day SMA to a sharp degree. This is extremely bullish.

The company has enough cash to buy back all the outstanding common shares for $3.00 per share yet it's only trading at $1.60. At $3.00 per share, the company would be valued at $54 million dollars. So just assume Apple wanted to slow Google down in its mobile ambitions, Apple could pay less than $100 million dollars to protect it's interest. Looksmart is basically like an insurance policy that will protect Apple from Google advancing further into the cell phone business at the expense of its search business.

Lets be honest, Google is doing almost nothing right in their business today. They pulled out of China, the largest growth market in the world which dropped it's stock price from $629 per share to $530 per share where it is today. This is largely due to China. That's an almost 20% hit to the stock price.

If Apple were to enter search (as only Apple could) with all their devices, Google would have to deal with the fallout from shareholders angry with Google's board of directors. These executives have a fiduciary duty to do what is best for their stock holders. If anything, maybe this would force Google to abandon plans to release a tablet later this year. Maybe that would lead to less competition among tablet manufacturers and Apple would sell an additional $1 million i-Pads due to the lack of competing products. That would add almost $1 BILLION to Apples revenues. This $1 BILLION figure does not include any other revenues generated from the search engine. It's a NO BRAINER..

 

[e-coli]

I love DropBox... because it works great and is free (for a limited amount of storage space).

If Apple purchased them, they'd probably be merged into Mobile Me/iDisk and it would no longer be free. It probably would be a good investment for Apple... but not so good for us non-paying users of the service.

I use my iDisk as a dropbox all the time. Works pretty well, but MobileMe can be incredibly, insanely slow at times.

 

[shel243]

The rise of the tech companies. Which one is going to become "Ultratech"?

Bonus points if you get that reference.

Wasn't he the leader of the Decepticons???

 

[coldplaysucks.]

Hi,

I wonder if Jobs is kicking himself for not acquiring Gizmodo two months ago?

s.

Its possible, but I think that the whole iPhone thing just helped build more excitement for the new device.

Just like that old saying "Any publicity is good publicity"

 

[coldplaysucks.]

I love how people think building a search engine like Google is so easy LOL.

Additionally, buying a search engine would be a complete waste for Apple since they would be fighting so much inertia with Google. .

TOTALLY,

Google is great because they are specialized in what they do, apple also has its niche (although its more like an uber niche) If they focused on a search engine product they might not be able to apply their talents to make it a "google killer."

This is also why I think Bing is going to be a looser.

 

[quinney]

What can Apple do to improve on search right now?

They could integrate the artificial intelligence IP they acquired with Siri.