Google Inc. (GOOGL) recently acquired two small enterprises in a move to bolster its advertising and wireless businesses.
The technology giant announced the acquisition of MDialog Corp., a video-advertising company, and a wireless-communications startup Alpental Technologies Inc. Financial terms of both the deals were not disclosed.
Boosting Video Ads via MDialog
MDialog Corp., a San Francisco-based video advertising technology company, works with a number of large media businesses to handle and deliver video advertising across a range of IP-connected products, including Apple’s (AAPL) iPad and iPhone, Android devices and Microsft’s (MSFT) Xbox.
Video advertizing 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 improve its DoubleClick online advertising platform.
Following the deal, mDialog will continue with its service. However, Google will gradually integrate mDialog technology into its DoubleClick platform.
Expanding Internet Services through Alpental
Alpental, a Washington based company, was founded by former Clearwire officials and develops low-priced, high-speed communications service applying the 60GHz band of spectrum. It basically develops tools related to next generation 5G wireless network.
The deal is expected to enhance Google’s recent efforts to globally expand Internet coverage. Google can also integrate Alpental’s technology into its Fiber service, which offers Internet data-transfer speeds of up to one gigabit per second in homes. In April, Google had stated its intention to add Wi-Fi to expand the range of its Fiber services. Therefore, the latest deal may help Google to extend service in some areas, without having to bear the cost of constructing new wireline networks.
Alpental’s employees have already joined Google.
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. It made five acquisitions last month and three in June.
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! (YHOO) and Facebook is also a concern.
Google currently holds a Zacks Rank #2 (Buy).