Google sees mergers big and small

By Eric Auchard

MOUNTAIN VIEW, California (Reuters) - Google Inc. has become more comfortable doing big acquisitions but still sees small technology deals as its primary thrust for buying businesses, its chief executive said on Thursday.

Chief Executive Eric Schmidt told reporters at a briefing at Google headquarters that the Web search leader remained open to buying larger companies, as it has done twice in recent months, but that these were meant to plug holes in businesses.

"We are more comfortable now than we were a few years ago to buy real businesses," Schmidt said in response to a reporter's question ahead of the company's annual shareholder meeting. "But we are not doing it for competitive reasons. We are doing it because it is part of building out a portfolio."

"So I think the pace will accelerate, but it is not a fundamental shift and we are not going to do it every day," he said of the company's willingness to entertain larger deals.

He also ruled out taking part in the wave of consolidation sweeping the news media business.

Google paid $1.65 billion to acquire video-sharing site YouTube in November, it's biggest deal at that time. Then, a month ago, it announced a $3.1 billion deal to buy DoubleClick, which offers advertising delivery technology and services.

Schmidt said that the company continues to view small technology acquisitions as the bread-and-butter of its merger strategy, mainly as a way to obtain new technology and talented engineers.

"In the past, we would buy businesses in lieu of (hiring) engineers," Schmidt said. These days, Google buys a start-up once every few days, or around one a week, he estimated.