Cashed up Google on acquisition trail

A chased-up Google is back on the acquisition path after a six month, downturn-induced hiatus, chairman and chief executive Eric Schmidt told a US conference yesterday.

“Acquisitions are back on,” he says. “We have lots of cash, I think. As you know, we have a large cash portfolio.”

Google Ventures, which opened in March with US$100 million capital funding, will focus on acquiring smaller rivals to boost its technology department.

“We decided that we wanted to invest in the technology area, both to get a financial return, of course, but also to accelerate the kinds of technologies that Google will benefit from,” Schmidt says.

“It’s too early to say how successful it’s going to be, but we are definitely investing.”

But Google Ventures website mentions “broad” areas of interest as “start-ups in industries including consumer internet, software, hardware, clean-tech, bio-tech, health care and others.”

“First and foremost, we’re looking for entrepreneurs who are tackling problems in creative and innovative ways,” the website says.

Depending on companies’ stages and need for capital, Google Ventures will invest anywhere from “seed funding to tens of millions of dollars” in its acquisitions.

“It’s definitely a sign that Google is seeing a stronger cashflow. In the downturn all of the internet players, including Google, cut back on capital expenditures to preserve cashflow,” Schmidt says.

But the company would not be drawn on specific financial goals for its acquisitions.

“It’s an experiment from our perspective,” says Schmidt. “So it’s too early to say how successful it’s going to be, but we are definitely investing.”

Schmidt also told the conference that the reemergence of Google Ventures was at the forefront of a new wave of growth in the US.

“After all, where will all the growth come from in America?” he says.

“It’s not going to come from high-volume, low-wage manufacturing jobs. It’s not going to come from the service industries selling to ourselves. It’s going to come from industries like advanced manufacturing,” he says.

“The growth is not going to come from moving money around between banks, which we’re pretty good at by the way. The growth is going come from investment decisions made here, in cities like Pittsburgh.”

Google Ventures is currently limiting its acquisitions to companies in North America but it expects future expansion around the globe.