When a company has a lot of cash and not so many new sources of revenue, it can be tempting to buy its way into new markets. But such a strategy has its risks, which are best illustrated by ill-fated acquisitions like eBay’s $3.1 billion purchase of Skype in 2005. eBay ended up taking a writedown for the deal and sold off two-thirds of the company at a $2.75 billion valuation four years after the purchase.
Kara Swisher at AllThingsD is hearing that Google is in talks to buy the online-deal-of-the-day startup Groupon, citing multiple “sources close to the situation.” It’s easy to imagine why Google would be interested in this acquisition. Groupon not only stands at the intersection of the social web and local commerce, two areas Google is eager to expand into. It’s also a bonafide success, with 20 million users in hundreds of U.S. cities.
Facebook has had its differences with Google and Apple in recent months.
And Facebook CEO Mark Zuckerberg tried his best not to comment directly on the budding rivalry with the two tech titans during his appearance at the Web 2.0 conference in San Francisco on Tuesday.
The future is no longer in plastic.
Or such was the message from Eric Schmidt when he was talking at the Web 2.0 conference in San Francisco. Credit cards are about to become as obsolete as the Sony Walkman in the age of the iPod. Replacing them will be the smartphone – Android phones in particular.
Eric Schmidt is fond of saying that the web isn’t a zero-sum game – that there is plenty of room for two emerging rivals like Facebook and Google to innovate and compete with both growing their revenue.
Here’s something to keep the rumor mills churning through the weekend.
Facebook has just sent out an invite to the media for a “mobile event” at its Palo Alto, California headquarters on Wednesday November 3.