“Google is looking to grow through acquisitions. Is this good news for investors? Let me offer up a sports analogy. In baseball, the lifeblood of a franchise is the minor league farm system. Producing your own talent produces a success that is more sure than trying to build a winner through free agency. Once every ten years the Yankees might win a World Series with a team built through free agency but I’ll show you example after example of how a team with a solid farm system outperforms,” Jason Schwarz writes for Seeking Alpha.
“Growth through acquisition is akin to a baseball team that abandons their farm system. Google management is sucking the life out of their R&D team each time they purchase a Youtube or an AdMob,” Schwarz writes. “Employees who innovate at Google might get used to the new growth through acquisition model and come to expect it.”
“Google might not be getting what they think they’re getting with their $750 million purchase of AdMob. Don’t get me wrong, AdMob is exploding right now with their 80% share of in-app advertising for the iPhone, but is it sustainable? Their success lies at the mercy of Steve Jobs,” Schwarz writes. “The only barrier holding Apple back from taking over the ad business of App Store offerings is themselves. It’s one Steve Jobs decision away. Eric Schmidt has already soured the Google relationship with Apple and I don’t anticipate Jobs will allow Google to make a killing off the App Store advertising.”
Full article here.
MacDailyNews Note: MacDailyNews’ mobile site and dedicated app, both of which are iPhone and iPod touch-only, are ad-supported and display ads from both Admob and Google AdSense for Mobile Content.
[Thanks to MacDailyNews Reader “GetMeOnTop” for the heads up.]