Google hopes $2.6bn will lift gathering clouds
ALPHABET’s Google has agreed to buy Looker Data Sciences for $2.6 billion (R38.9bn), expanding its offerings to help customers manage data in the cloud.
The acquisition announced yesterday gives Google a new tool in its campaign to sell more cloud storage and software.
So far, the company has struggled to compete with larger rivals Amazon.com and Microsoft and last year replaced its head of cloud, Diane Greene, with long-time Oracle executive Thomas Kurian.
Looker, based in Santa Cruz, California, helps companies visualise and analyse the data they store in the cloud.
The deal is Google’s biggest since it acquired smart-home company Nest Labs for $3.2bn in 2014, according to data compiled.
Any deal-making by Google now will get a close look by regulators, since the company is facing an antitrust investigation by the US Justice Department.
However, analysts’ initial reaction is that the anticompetitive threat to the acquisition isn’t high in this domain. Google shares were down less than 1%.
Cloud is important for Google because growth is slowing in its core search-advertising business. Google already has analytics tools, but the company noticed many of its customers were also using Looker, Kurian said in an interview.
“Looker complemented the Google Cloud analytics foundation,” he said. Google didn’t plan to cut off Looker from working with its competitors, because many of its customers use more than one cloud, Kurian said. Working with other cloud systems was a critical part of Google’s overall strategy, he added.
Kurian has been concentrating on hiring new sales people and refocusing Google’s cloud efforts on several key industries. Investors and analysts have repeatedly asked when the company will do a major acquisition to boost its presence in the space.
“Many people have asked us for many months: ‘Are you rushing to do acquisitions?’ We’ve been very disciplined in building our sales, go-to-market capability, and our own products.
“We’ve chosen Looker as a very complimentary technology that a lot of customers will find value in very quickly,” Kurian said.
The two companies already share more than 350 joint customers, including BuzzFeed, Hearst, King, Sunrun, WPP Essence and Yahoo!
The acquisition of Looker is expected to be completed later this year, subject to regulatory approval.
Charlotte Slaiman, policy counsel for consumer advocacy group Public Knowledge, said Google probably realised it was under the microscope on any M&A deals, but the Looker purchase seemed to be a “vertical merger”, which was harder for antitrust authorities to block.
“But there still might be real concerns,” she said.
The company was valued at $1.6bn after a venture capital investment late last year, according to data firm Pitchbook.