Who Should Facebook Acquire to Compete with Google?

  • Share
  • Read Later

Google’s been on a bit of an acquisition spree this year. They purchased AdMeld back in June for $400 million, and more recently, Motorola Mobility for a reported $12.5 billion. Moves like these, of course, point to strategies the search giant is likely to implement in the near future, and perhaps more importantly, what areas of the market it’s looking to compete in. (Acquiring Motorola Mobility’s hardware points the cross-hairs squarely on Apple and the iPhone, for example.)

Facebook, however, isn’t idling by. According to a new Bloomberg report, the 750 million-user social network is looking to acquire 11 new companies this year to help expand its user base.

(LIST: 10 Things You Shouldn’t Do On Facebook)

“Two years ago we didn’t have a track record in acquisitions,” says Vaughan Smith, Facebook’s director of corporate development. “While we expected them to work well, it was still a crapshoot how they’d turn out. We’ve built a culture that supports entrepreneurs, and it’s working incredibly well.”

Facebook has already acquired five companies so far this year: Notably Beluga, a group messaging service that served as the backbone for the company’s new Messenger app, and Snaptu, a mobile app developer based in Israel. The company is guessed to have recorded $2 billion in earnings before taxes, depreciation and amortization this year, not to mention that it’s managed to raise another $2 billion from investors. The company is estimated to be worth anywhere from $50 to $70 billion dollars.

Facebook also stirred up some news when it announced a partnership with Skype to better integrate video chat into the service. Skype also recently acquired GroupMe, a group messaging service.

So if Facebook’s goal is to increase its user base — supposedly to hit the one billion user mark — what kind of new services would it need to incorporate? It recently gave its gaming pages a facelift, but that seems more of a ploy to keep already-entrenched users who play games on the site longer.

(MORE: App of the Week: Facebook Messenger)

I think the answer lies in mobile apps (which makes the Snaptu deal look, well, smart). Facebook’s Messenger is nice, and there is that rumored photo app due out to challenge Instagram. But if Zuck’s plan really is to connect the whole world, Facebook will need some sort of cross-platform video conferencing service—and fast. (Or at least faster than Skype/Microsoft are working with them to, if they are.) RIM was reportedly working on one, although the company is probably out of Facebook’s price range after the Motorola-Google deal caused the company’s value to soar. (Plus, Facebook entering the unfamiliar hardware space would be incredibly challenging, to say the least.)

So, let’s play Cupid here. Who should Facebook look to acquire to keep pace with some of the things Google’s doing really well? Any ideas?

Chris Gayomali is a reporter at TIME. Find him on Twitter at @chrigz, on Facebook, or on Google+. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.

0 comments
Sort: Newest | Oldest