Google recently acquired Zetawire, a Toronto-based company that facilitates mobile payments. I thought this acquisition raised some interesting considerations for small software companies.
- Pre-revenue companies are once again/still saleable by all accounts Zetawire was effectively pre-revenue. For many years that has been a difficult acquisition as buyers are a more skeptical bunch post dot-com and want to see proof of the product and business model that sales to well-known companies demonstrate. No revenue makes proof tougher to provide but apparently not impossible.
- Mobile is still a land grab as mobile phones become the predominate access point to the web, companies are doing whatever they can to position themselves as the leader in this space, and Google is serious about being there.
- Patents seem to have value (again/still?) Zetawire has one particular patent that seemed to attract Google. Since recent rulings in Canada and the US, the consensus seems to be that patents are more valued; some smaller software companies might do well to consider adding a patent or two to their portfolio.
- Google is still doing small deals (17 last Q). Google 17 - Microsoft 1. Enough said.