Every aspiring entrepreneur wants to come up with the next killer application. But the question is what is a killer app actually? How do you validate that your application is a killer app? A common rule of thumb is if any of the Big Guys (Read Google, Yahoo, MSN, Amazon, Ebay etc) wants to buy you than your application can be a killer application?
Success for a startup approximately equals getting bought. You need some kind of exit strategy, because you can't get the smartest people to work for you without giving them options likely to be worth something. Which means you either have to get bought or go public, and the number of startups that go public is very small.
If success probably means getting bought, should you make that a conscious goal? The old answer was no: you were supposed to pretend that you wanted to create a giant, public company, and act surprised when someone made you an offer. Really, you want to buy us? Well, I suppose we'd consider it, for the right price.
Paul Graham In "Ideas For Start Up"
With this thought in my mind I begin to explore what the big guys of Web 2.0 would like to buy? This proves to be a Holy Grail. Especially when we have the example of EBAY buying Skype with out any possible synergy between their lines of business.
So I thought lets compile the data and do some crunching to predict who may wants to buy what. J . I begin by analyzing what ultra cool Google might be interested in buying? What's there in Google shopping list? I will analyze the buying pattern of all the three big boys in subsequent posting.
Lets start with Google
I found a complete list of acquisitions made by Google at wikipedia . Even in Pre IPO phase Google was always scouting for good start up. But post IPO its acquisitions are more widely know and good news is currently Google is on a Shopping Spree .at first glance they all look like madness and without any master plan. But on a deep analysis you can find some strange pattern.Surprisingly most of the acquisitions made by Google are in the category of "Shadow Applications " very few of them are in the front end? Only a very Few of the companies were bought in order to enter the new business (Read: Picassa, Pyra Labs, KeyHole Outride etc).
Most of them were just applications which can strengthen the existing product offering which are not in leadership position in their respective markets. Something likes a steroid for a dull application in Google Basket. Like Deja which was bought to re launch Google Groups. "Applied Semantics " which was bought to develop contextual advertising like Ad Sense and Ad Word. They paid 102 Millions for net semantics. Later on they acquired sprinx to enhance these contextual Ad services.
Zip Dash was bought to provide a revenue stream on the top of Google Maps.
Reqwireless was acquired to avail Gmail on wireless devices .
dMarc Broadcasting was acquired to extend advertising onto audio channels.
Writely was acquired to provide online web based word processor
Baidu was acquired to get a geographical reach in a niche market.
Cut a deal with AOL to get a lot of user base, which stick to Default.
There are many more. But I guess this list is enough for the purpose of discussion
So? Does that Looks like a totally random selection with out any coherent logic? It looked like this to me initially. I thought money has got in to the head of folks at Google. Predicting what Google will buy is not easy. Can I do it?
Honestly I can't but I can find some common characteristics, which are present in all these firms and try to extrapolate from the data. We can only point in the general direction of the next buy of Google.
With all these data I set down to do crunching and finding a pattern, super imposing one model after another. (Actually I had dinner with one Investment Banker last night so I am still under the hangover J).
Sadly I still can't shout Eureka! So I share my finding with you and trust "wisdom Of Crowd " to help me. So you go thru the details I have given here and come up with your own predictions.
I will post my analysis some time soon during the day or tomorrow. Now it's Time to Go Back to work J.