In the past two years (2012 to 2014) Google has spent billions on corporate acquisitions. Most notably of which the Robotics company Boston Dynamics and the smart home innovator Nest Labs.

It seems that everyday in business news we hear about the acquisition of a smaller company by a larger, more established company. Consider Facebook’s equation of Oculus VR, Google’s acquisition of Nest Labs[1], and Apple’s acquisition of Beat. All of these examples demonstrate a mega company buying an idea, instead of creating one. My question regarding these acquisitions is simply is this good for the market?

We all understand that when competition is limited in a specific market monopolies arise and compromise the principles of supply and demand by artificially decreasing supply in order to increase price and thereby increase corporate profits. It’s clear to see that as these tech giants fight for supremacy in the market they make it harder and harder for new players to enter the game because, as these companies have demonstrated they acquire every idea that poses a threat to their continued success. Thus it appears that the technology industry has shifted its focus from innovation to acquisition[2]. This change in strategy, at least on the part of corporate giants such as Microsoft, Apple and Google, carries with it sever complications for the market and for the future of technology. As more and more of the competition is obtained by these giants the market will become more and more concentrated and eventually, if things remain the same, there will be only one of these companies left standing and one of the most prosperous industries will be come one of the most detrimental monopolies.

[1] http://www.businessweek.com/articles/2014-01-16/googles-recent-acquisitions-robots-welcome

[2] http://techcrunch.com/2014/02/25/the-age-of-acquisitions/