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Google's Buying Binge

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Google snaps up a UK price comparison site along with a video content business. Data storage company deals are also hot this week in tech M&A.

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Beat that Bing!

Google
(GOOG) has bought UK price comparison site BeatThatQuote, acquiring the web property for £37.7 million earlier this week. The company helps users search, compare and apply for lower rates and better prices on an array of financial, insurance, and legal services and products. Google is set to utilize BeatThatQuote's technology to better deliver deals and financial comparisons.

Managing director of the newly acquired company John Paleomylites took to the company's website to announce the deal, posting:

BeatThatQuote.com today was sold to Google for GBP37.7 million. We think this deal is a tremendous opportunity for our company to develop new and innovative options for personal finance in the UK.

Our team is excited about becoming a part of Google. We look forward to working with their engineers to create new tools making it easier for consumers to choose the right financial products. We think we can offer more transparency and better pricing information than existing online offerings.

We are confident that by combining BeatThatQuote.com's expertise in UK financial products with Google's technology, we'll accelerate innovation in this field, benefiting consumers and the companies offering these products. We plan to keep working with our current partners and look forward to working with new ones, too.


This is an interesting move and will have to be watched closely -- it's widely speculated that this service could be integrated into Google's new deals service to be their "Groupon killer".

Deal Deets:
Google wholly acquires BeatThatQuote for approximately $61 Million in cash.

What Else is New for Google

Google's video business group has added new team members as YouTube purchased Next New Networks for an undisclosed sum. Based in New York and backed by former television executives from Nickelodeon and MTV, Next New Networks has built a network of videos created both in house and by independent filmmakers.

YouTube has millions of people uploading videos, but in recent years it's focused on attracting and working with those whose content has large fan bases. It shares advertising revenue with independent content creators, many of whom work out of their homes. Last year, YouTube announced plans to give away $5 million to its top "vloggers" and began hosting meetings to give tips on creating online videos.

The strategy has been working, if too slowly for Director of Global Content Operations Tom Pickett.

In fact, the number of partners making over $1,000 a month is up 300% since the beginning of 2010 and we now have hundreds of partners making six figures a year. But frankly, "hundreds" making a living on YouTube isn't enough and in 2011 we know we can and should do more to help our partners grow.


The YouTube Next initiative, as it's being called, sounds great in theory. But the biggest challenge will be the scalability of the program to handle more than "hundreds" of partners.

Deal Deets: Google acquires Next New Networks for an undisclosed sum.

Western Digital Bags Hitachi's Hard Drive Unit

Western Digital (WDC), the largest maker of hard drives in the world, has signed a deal to pay $4.3 billion for its competitor business unit at Hitachi (HIT), currently the third largest. The resulting company will keep the Western Digital name and will appoint Steve Milligan, currently president and CEO of Hitachi Global Storage Technologies, as president of the new business. Hitachi GST is a wholly owned subsidiary of Hitachi.

"This brings together two industry leaders with consistent track records of strong execution and industry outperformance," Milligan said in a statement, adding that the combined company's products and services will range from "innovative personal storage to solid state drives for the enterprise."

The deal is interesting for two main reasons. Firstly, traditional spinning hard drives are seeing serious competition from solid-state flash memory. Almost all new cutting edge technologies from tablets to smart phones are using flash memory, while declining technologies such as PC have long relied on hard drives.

Secondly, Seagate Technology, the second-largest maker of hard drives will be dwarfed by the newly combined companies, shipping less than half the number of units according to research firm iSuppli.

Deal Deets: Western Digital said that the deal includes $3.5 billion in cash, plus 25 million of its common shares. The stock is valued at $750 million based on the company's closing stock price of $30.01. After the closing of the deal, Hitachi Global Storage's parent, Hitachi Ltd, will own about 10% of Western Digital.

NetApp Buys LSI's External Storage Business

LSI has agreed to sell its external storage business to NetApp (NTAP) for $480m in cash, as the company looks to re-focus its efforts on the semiconductor market.

The external storage business generated revenues of $705m in 2010, and most of LSI's storage-based employees are expected to join NetApp, the firms said in a joint statement. Meanwhile, LSI will retain its adapter business, which develops the Megaraid and 3ware storage controllers along with software for direct-attached storage environments.

LSI sees the move as a way of focusing their efforts: "We're excited by the opportunities we have been pursuing in our semiconductor business and are well positioned at the forefront of a strong pipeline of design win ramps that we expect to drive top line growth," says Abhi Talwalkar, LSI president and chief executive.

NetApp meanwhile, sees an adjacent market to attack. "These products are basically targeted at a different market" to NetApp's other product lines, said CEO Tom Georgens on a conference call. "This gives us an opportunity to go after that market aggressively."

This deal is not only the second data deal this week, but follows several big acquisitions in the booming data-storage industry over the past six months. A number of tech companies, from midsize NetApp to such giants as Hewlett-Packard (HPQ) and Dell (DELL), are competing to satisfy the growing demand for capacity to store and retrieve the mountains of digital data being produced by individuals, businesses and government agencies, particularly with the exponential rise of online video.

Deal Deets: NetApp purchases LSI's external storage business, including the Engenio line for $480 million in cash.

No positions in stocks mentioned.
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