Google and Acquiring Tiny Companies

I like Google and enjoy reading about the company. Even so I find the number of articles about the minor moves they make strange. At some point this fascination with the minor moves Google makes will stop but for now it is hard to miss stories about Google anywhere I look.

The post on John Battelle’s Searchblog (a great bog) about Google buying Dodgeball was a great example. The entire post:

News is here. What is Dodgeball? I dunno, but is seems like Orkut + Mobile done right, I think. More later.

From the Dodgeball company web site:

As a two-person team, Alex and I have taken dodgeball about a far as we can alone. Since we finished grad school, we’ve been trying to figure out how to grow dodgeball and make it a better service along the way. We talked to a lot of different angel investors and venture capitalists, but no one really “got” what we were doing – that is until we met Google.

Today I read a new article from Paul Graham (his website has great essays – highly recommended): Hiring is Obsolete. As usual he makes many great points in the essay. The point that most strongly connected with me today was his statement:

What companies should do is go out and discover startups when they’re young, before VCs have puffed them up into something that costs hundreds of millions to acquire. Much of what VCs add, the acquirer doesn’t need anyway.

Why don’t acquirers try to predict the companies they’re going to have to buy for hundreds of millions, and grab them early for a tenth or a twentieth of that? Because they can’t predict the winners in advance? If they’re only paying a twentieth as much, they only have to predict a twentieth as well. Surely they can manage that.

I must admit when I read stories like the acquisition of Dodgeball (Information Week [the broken link was removed] – CNN etc.) I think of the internet bubble. Paul Graham has given me reason to think that instead of viewing the newscoverage of a very small buyout as a sign of a frenzy it is actual another sign Google is ahead of the rest of the crowd. I think no matter what the widespread coverage of the story is a sign of a media frenzy with anything Google does (among a certain segment of the media). But Paul Graham’s article reminds me to examine deeper what such moves might mean.

Google has managed to avoid becoming a bureaucracy run by MBAs trying to do basically doing what everyone else is doing – just a little bit better. They really are making an attempt to be a different kind of company. They have the potential to succeed amazingly (which they have done thusfar), or fail spectacularly. But in any event, Google might actually be worthy of all the attention: they really are taking the road less traveled. I wish them well.