Google tops Cisco in start-up acquisitions

It's a sentiment rousing entrepreneurs in Silicon Valley: build a start-up compatible with Google Inc.'s business strategy, pick up some venture capital along the way to stay competitive, and sell quickly to the cash-oozing search giant. In the past week or so, Google tossed RSS feed aggregator Feedburner Inc. and server computer start-up Peakstream Inc. into its shopping cart. Both companies were quick exits for their venture backers, especially Peakstream, which raised its first funding round less than a year ago from VC kings Kleiner Perkins Caufield & Byers and Sequoia Capital (two original investors in Google).

For years Cisco Systems Inc. has been the most prolific acquirer of venture-backed start-ups, pocketing 22 such companies since 2004, according to industry tracker VentureOne. But Google has emerged at the top of the list so far this year, acquiring five venture-backed start-ups to Cisco's four. And it's showing no sign of stopping, as the search outfit looks for companies that fit its overarching mission: "To organize the world's information and make it universally accessible and useful." In other words, make money off online advertising, where Google generates 99% of its revenue.

A look at the company's acquisitions this year highlights just how far-reaching its mission is in the start-up world: Peakstream, a maker of software for running powerful computers; FeedBurner, which creates Web feeds for bloggers and podcasters to distribute and monetize their content; Greenborder Technologies Inc., a maker of software that protects PCs and corporate networks from malicious emails; Marratech AB, a producer of software for video conferencing over the Internet; and Adscape Media Inc., whose technology inserts advertising into video games. And Google plans to knock further into the wireless handheld market, a hot area for start-ups developing technology around mobile marketing, content and search.

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