) is looking for permanent ways to grow and expand. Recently,
Google announced that it has acquired marketing start-up Wildfire
for an undisclosed amount, strengthening its foothold in the world
of social media.
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Though not publicly disclosed, sources have indicated that Google
will pay about $250 million for the acquisition.
Wildfire provides software that helps businesses to place ads on
social-media sites like
) and Pinterest. It has roughly 16,000 customers, including
Google is a market leader in online advertising and it has been
trying to explore various ways to increase its advertising revenue
and fight competition. The company had stepped up its efforts in
social media with its social network Google+, a service started in
2011 that competes directly with Facebook.
The addition of Wildfire may bolster Google's own social network,
Google+, and provide insights about rival platforms such as
Facebook. The acquisition will allow Google to provide advanced
software and services to brands that want to run contests, branded
games and more on Google+. By acquiring Wildfire, Google might be
better positioned to compete against Facebook and others in the
social media space.
This is Google's second purchase specifically related to social
media expansion. Recently, Google bought Meebo for about $100
million, a social media start-up that makes mobile applications for
consumers as well as publishers, designed to enable online
In fact, the Internet search engine is on an acquisition spree. In
May, Google closed its acquisition of cell phone maker
Motorola Mobility Holdings, Inc.
) for $12.5 billion ($40 a share). In 2011, Google bought at least
Google has done very well in the second quarter, with its gross
revenue touching a record $12.21 billion. Revenues from both
Google-owned and partner sites continued to grow in double digits
on a year-over-year basis. Historically, Google has always fared
), which has been struggling to uphold itself, and
), which is yet to gain critical mass.
However, legal entanglements related to competitive matters or
patent infringements remain an overhang. Google retains a Zacks #3
Rank, which translates into a short-term Hold recommendation.