Commentary

Did Google Acquire ReMail For Its Technology -- Or Talent ?

reMail/Google

Set the entrepreneur loose, allow him to develop the application you want, and reel him back in, along with the technology for a sweet cash and/or stock deal. It seems Google's pattern lately, though more than anything the trend hearkens back to Eric Schmidt's comment during an earnings call that the Mountain View, Calif., company would make at least one small acquisition monthly during the coming year.

Google acquired reMail Wednesday. The iPhone application provides full-text search of Gmail and IMAP email accounts. And while the terms of the deal were not disclosed, some believe Google will kill the technology and build pieces of it into its Nexus One mobile phone or Android platform.

People have already noticed that the application, which sorts contacts by priority sending them to the top of the list, has vanished from the iPhone store.

ReMail CEO Gabor Cselle announced the acquisition news on his blog, but as ReadWriteWeb points out, there's an interesting behind-the-scenes story. While Y Combinator funded the startup, Cselle was a former Gmail intern and received advice from Paul Buchheit, the creator and lead developer for Gmail.

Cselle also worked as a Google software engineer between April 2004 and October 2004, and then again between October 2006 and March 2007, according to his LinkedIn profile.

Last week we learned that Google acquired Aardvark, founded in 2007 by engineers and entrepreneurs from Google, Yahoo, and other major Silicon Valley tech companies. Aardvark's technology lets you ask a questions and then routes the query to those in your social network most likely to know the answer.

Some believe the move by Google to gobble up search technologies will keep the innovations out of competitors' hands, such as Apple and now MicroHoo, the combined search business of Microsoft and Yahoo. The two companies this morning announced they would move forward in making Bing Yahoo's search engine after receiving regulatory approval from both the United States and European Union.

And while not all startups acquired by Google were founded by ex-employees of the company, it's interesting to note the most recent that were. Since these entrepreneurs have worked at other companies, they not only know Google's technology, but its competitors' as well.

1 comment about "Did Google Acquire ReMail For Its Technology -- Or Talent ?".
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  1. John Jainschigg from World2Worlds, Inc., February 18, 2010 at 5:16 p.m.

    Laurie -- spot on with this. This is too smart a thing for Google to do for it _not_ to be conscious and deliberate (though there are probably huge potential legal liabilities that will prevent its ever being enshrined as policy and acknowledged); and stands as a huge lesson for large businesses looking for ways to innovate.

    Investing internally doesn't often work. The Microsoft 'ex-exec tells all' story of two weeks ago proves the point -- that given opportunity, partisans of established lines of business will tend to strangle new ideas through a combination of snarking, not 'getting it,' refusing to allow themselves to be leveraged, fighting for the available dollar, talking about 'this quarter's revenue,' hiring away key talent, and other means. That's apparently the state of nature.

    But Google has figured out a way around this, and is both saving money (in the long run) and doing an ethical thing in the process (nurturing good ideas, albeit 'outside' the company, and helping to insure that their creators are adequately compensated). Someone comes to them with an idea, that idea gets reviewed, and if everyone thinks it's great, the inventor signs some papers, quits, and is quietly introduced to venture funding sources (I wonder how hard venture is to find, these days, if you scrawl 'Eric Schmidt introduced me to these people - they're ex-Google - Google loves them, thinks it's a great idea and if it plays out, they want to buy the company back' on the cover of a business plan?)

    The nascent company finds capital (and independence) probably far in excess of what Google would internally give it, based on the normal bean-counting process. So the entrepreneurs are happy, the budget is scaled to deliver, and the creatives can get on with the work, rather than justify their existence every three months in a painful 'Why aren't you producing revenue yet?' meeting.

    And if the business succeeds, ba-da-bing, Google buys them back for reasonable money (not least because everyone is still friends), and by this time, the product is market-tested, so they know they're not buying a pig in a poke.

    This is a beautiful thing. SO much more beautiful than forcing your smartest people to quit because you undervalue their ideas (and of course, they will quit anyway after a certain point). SO much more beautiful than starving innovative projects of the funding and commitment they need to fly.

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About the Author

Laurie Sullivan is a writer and editor for MediaPost. You can reach Laurie at lauriesullivan@gmail.com.