Google deflates

Contact: Brenon Daly

Like nearly all tech companies, Google has had a rough go of it lately. The search giant has cut jobs for the first time and scrapped a number of projects that it had planned during its more freewheeling days. The programs on the chopping block are both organic (print ad initiative) and inorganic (social networking service

Google bought in mid-2005, just as it was beginning to ramp up its M&A spending. It inked as many deals that year (six) as it had in the previous two years combined. And it went on to double the number of acquisitions (11) in 2006. The frenzied shopping rate – buying a company each month – dropped off sharply last year. Google deflating isn’t all that surprising, given the underwhelming performance of the service that Google bought for less than $20m. The startup’s founders lasted about two years at Google, but they said the whole process was ‘incredibly frustrating’ for them. In an email as they walked out the door, the pair said Google didn’t give the service the engineering support that it needed. In the coming months, all support will be pulled.

According to a posting on the website, the service for hipsters and cool clubs will continue to function through February, with all accounts being erased around the beginning of April. Appropriately enough, the message also voices the notion of a ‘shutdown party.’ We guess that’s the Web 2.0 version of a wake.

Deal flow at Google

Year Number of deals
2003 3
2004 3
2005 6
2006 11
2007 15
2008 4

Source: The 451 M&A KnowledgeBase