Google’s Rules of Acquisition: How to Be an Android, Not an Aardvark

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measures social actions relating to Web content: blog comments, votes on Digg or Reddit, bookmarking on Delicious, tweets, and the like. PostRank’s tools for measuring user engagement complemented—but went well beyond—the free traffic-measurement tools available to website owners through Google Analytics. In fact, when it developed its user interface, PostRank decided to presented its findings as a data layer on top of information from Google Analytics.

After integrating so deeply with Google’s tools and sharing the stage with Google at a number of conferences, PostRank could hardly avoid having business-related conversations with the Google Analytics team. “We found ourselves talking about quote-unquote ‘deeper partnerships,’ and the rest is history,” says Ilya Grigorik, PostRank’s founder and chief technology officer. Google bought the startup last summer with the goal of formally integrating PostRank and Google Analytics. Soon, Google Analytics users will be able to see not just how people are using content within their site, but what they’re saying about it outside. “The idea that we could come in and integrate and provide more insight to customers was very, very appealing,” says Grigorik, who is now a software engineering manager at Google.

What Google Can Do for You

Even more than the money or the prestige, it may be the opportunity to solve problems “at Google scale” that prompts many startup entrepreneurs to accept Google’s purchase offers. Lawee says the company doesn’t invest in an acquisition unless it thinks it can use its resources and existing products to leverage the acquired company’s technology into something bigger. “As an entrepreneur, you are irrationally passionate about what you are trying to achieve,” he says. “So it is quite critical to you that you achieve it, and if there is a place you can achieve it more easily than on your own, that is a special place.”

Google has worked to refine a set of procedures and resources—a whole infrastructure, really—to make sure every acquired team finds a foothold within the company, a home where they can get to work on achieving their vision. The reorganization under Page was the starting point. “There has been a sea change that makes it easier to help people understand where they fit in,” says Butler. “If we are going to make an acquisition for Chrome, then Sundar [Pichai, vice president of product management] and his vice president and directors are going to be behind it, and there is going to be an executive at Google responsible for those people. There is always a sponsor.”

Butler herself is a key facilitator. Over the last year, she’s doubled the size of her integration team, from four to eight—and she says there are another 80 M&A experts across Google’s core product areas. There are specialists who handle setting up newly acquired teams with office space, desks, and chairs; making sure that patents, contracts, and other assets and obligations are smoothly transferred; training managers to understand how performance reviews, promotions, and other procedures work inside Google; and even transferring an acquired company’s software into Google’s code base. “My team works as the quarterback and keeps all the other teams moving,” Butler says.

When it all goes smoothly, former startup founders usually find that their lives inside Google have been vastly simplified. “Acquired Googlers consistently rank their work-life balance at Google higher than they did before, and I think it’s because we make it easier for them to do the things they love,” Butler says. The free meals in Google’s famously high-end canteens are just one part of it. (Outside estimates are that the company spends $20 per employee per day on food—or well in excess of $100 million per year.) “When you take an entrepreneur who has been watching their pennies and doing things with chicken wire and duct tape, and suddenly you put them in an environment that is rich in resources—intellectual, technical, storage-wise, and even culinary—then you free them up to do the things they are best at and the things they are most passionate about. They don’t have to worry about anything other than innovating.”

Ilya Grigorik

Grigorik says Butler’s team helped PostRank’s entire 12-person team in Ontario get work visas and find new homes in Silicon Valley. “There is a lot of built-in structure that made the transition really painless,” he says. And once the team arrived at the Googleplex and connected with the Google Analytics group, managers made sure to keep them together. “Google is this ginormous entity with many products, but even though it is a big organization it is driven by small individual teams,” Grigorik says. “We managed to preserve the team identity, which I think was very important. It isn’t the case that we were just dissolved into some sort of larger organization.”

To help acquired Googlers find their way inside the “ginormous” company, Google organizes an “Entrepreneurs at Google” conference and speaker series two to three times per year, according to Butler. It’s a place for … Next Page »

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Wade Roush is the producer and host of the podcast Soonish and a contributing editor at Xconomy. Follow @soonishpodcast

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  • Patrick

    Great article but I was looking forward to read about how Google manages the fact that in an acquisition the founders are generally leaders and now multi-millionnaires. I see it presenting many challenges such as position/title, reporting to many people instead of no one, pay scale that might be almost insignificant considering the new wealth, etc.. In your interviews did any information come up regarding those topics?

  • Patrick: That’s an excellent question. I confess I did not ask about it in my interviews. But based on my reporting, I can guess how David Lawee or the other folks I talked to might respond. I think they’d say that the founders who become acquired Googlers still act much like entrepreneurs, but that they no longer have the added worries and responsibilities of keeping a company afloat. They certainly have superiors to report to (hopefully just one or a few though, not many) and if they were really uncomfortable with that they would probably self-select out of being acquired. I can’t imagine that positions or titles are much an issue…Google seems to have a thick layer of engineering managers. As for pay scales, I know Google is competitive but not extravagant, and that stock/options come in the form of RSUs that vest only gradually, with lots of conditions to discourage early departures. The one big question you raise, which I am also curious about, is whether an acquired founder’s newfound wealth (assuming that their ownership portion of their old company was large enough to bring them a multi-million dollar payoff) puts them in a more independent, less teamwork-oriented frame of mind. It may, but I also have the sense that most of these people only join Google because it’s clear to them that they can accomplish more inside the company than on their own.

  • F Libit

    Great article. Makes me wonder though – who was Motorola Mobility’s “sponsor” inside google?