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Report: Google readying its checkbook

Google thought start-ups were overpriced earlier in the year, but its recent purchase of On2 Technologies may be a sign that it's once again in the acquisition market.

Google CEO Eric Schmidt is back on the buying trail. Dan Farber/CNET

One clear sign that Google is feeling better about its business prospects? Its CEO is in a buying mood.

Google's Eric Schmidt said Monday the company was "seriously looking at acquisitions" in an interview with Nikkei spotted and translated by Dow Jones Newswires. The intent appears to involve start-ups working on cloud computing technologies, a huge area of focus for Google with projects like Wave, Chrome OS, and Google Apps.

Back in March, Schmidt was less bullish about the prospects of cutting a deal based on the economic conditions at the time and the prices on the market. He told Charlie Rose "we're unlikely to buy anything in the short term partly because I think prices are still high." Now with the value of promising start-ups having hit near bottom, as evidenced by the fire sale price paid for iLike by MySpace last month, perhaps Schmidt has decided that it's a buyer's market.

What might Google want? Kara Swisher at Boomtown speculates on few options for the company, noting that Silicon Valley venture capitalists are polishing their portfolios for a potential open house visit from Google. According to her sources, Google is looking at smaller companies rather than trying to make a big splash with something along the lines of the much-rumored Twitter acquisition talks.

Google recently purchased video start-up On2 Technologies for $106.5 million, but the deal is being held up by an investor lawsuit filed against On2.