Google Inc. (NASDAQ:GOOG) has missed its Q3 targets, which the analysts on Wall Street presented to them; however the good thing that has surfaced is Google Ventures, which is responsible for buying and selling companies under the company’s vast portfolio to suit its strategic goals. Their main purpose is to achieve financial returns which they need excessively, because currently the company is too dependent on ad revenue, which is responsible for the company’s 89% of the total revenue.
Now Google Ventures has turned its attention to Europe where it has started buying companies that are at the late stage of the development process; most of these companies, which the venture capitalists had been funding, are about to be launched soon. This July, this European arm of Google Ventures was allocated a budget of around $100M to buy out new and creative technological business ideas.
Google has denied allegations of being a market intelligence gathering arm, which also makes sense as it’s already in trouble with the investors for not being able to show the kind of output that its investors expect from it. Keeping tabs on small companies would be a waste of resources for them at this stage of their fiscal year. The company has been selling some of its smaller acquisitions, which didn’t perform well, to their rivals Facebook and Yahoo.
Before launching into Europe, Google Inc. Ventures was concentrating its efforts on the Silicon Valley groups, however now with five people heading the European arm they have a strategy to work alongside the top investors. Some might argue that implementing a mirror image of their strategy in the US is not a smart move for Europe; however the slight difference would be the Europe arm concentrating more on startups that are much closer to the launch of their ideas.
The flexibility to change this approach is definitely there because after a while when Google Ventures expands its operations in Europe it would definitely like to invest in the early stage as well. The group is headed by Eze Vidra who set up the Google Campus in London, Peter Read who is an angel investor, Avid Larizadeh who co-founded bottica.com along with MG Siegler a venture capitalist who started off as a tech blogger.
Things could definitely turn complicated politically like the Morgan Stanley sale to a Russian Oil Company which is still pending state approval. How? Because Google Ventures has plans to include Russia in its buying and selling plans. The reason why Google Ventures has started considering buying in Europe is the growth spur which has started off with US investors funding around $10M. This is the kind of investment, which essentially creates companies worthy of the Silicon Valley.
It seems that Google Inc. (NASDAQ:GOOGL) Ventures is set to make the most of a region where start-ups are proving to be lucrative for bigger companies and investors. European start-ups had received around $808 Million in 2010, which had gone up to $1.9 Billion in 2013 and is expected to go up to $3.5 Billion by the end of 2014.
