) recently acquired two small enterprises in a move to bolster its
advertising and mobile businesses.
The technology giant announced the acquisition of Directr Inc., a
video-creation company, and a mobile-messaging app Emu.
Financial terms of both the deals were not disclosed.
Boosting Video Ads via Directr
Directr is a Boston-based mobile-video app for Apple's (
) iOS, and is used by a number of small businesses to easily make
and upload short marketing videos on the Internet.
Video advertising is being increasingly chosen over traditional
display advertising because of the growing importance of mobile
devices where display ads don't work that well. Google remains the
largest player in a shrinking mobile search market. So it needs to
innovate rapidly to fend off competition from non-search apps such
as Facebook that are grabbing an increasing percentage of mobile
advertising dollars. Google intends to use the acquisition to
further enhance YouTube's advertising tools.
Following the deal, Directr's staff will join YouTube's video-ads
team. Directr will continue with its service and will gradually be
made available for free.
Boosting Mobile Capabilities through Emu
Emu, a California-based start-up, offers a smartphone-texting
service that includes built-in personal-assistant technology to
help users schedule meetings, share locations, set reminders for
activities such as lunches and movies. Emu works a lot like Siri,
or Google Now, by adding important information to texts after users
enter them by using location awareness and artificial intelligence.
The deal will help Google to enhance Google Now and will boost its
capabilities beyond being just a contextual launcher. It can also
bring about improvements in Hangouts, which is currently lacking in
features and help it transform into a central, multi-featured mode
of communications on the Android platform.
The Emu app will be closed following the deal.
Google is a stable company with consistent revenue growth and
profitability. It remains the dominant player in search across
desktop and mobile platforms. To add to its capabilities and
bolster its existing businesses, Google continues to acquire
smaller companies with specialized technology and/or strong
presence in chosen markets.
However, the impact of acquisitions is not clear because Google
usually keeps them small and says little about them. Intensifying
competition from companies like Yahoo! (
) and Facebook (
) is also a concern.
Google currently holds a Zacks Rank #3 (Hold).
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