Palo Alto, California: Silicon Valley companies looking to put their cash to work may drive a wave of mergers this year, bankers and venture capitalists said.
Companies are eager to make acquisitions because many of them have cut research budgets, said Robert Ackerman, founder and managing director of Allegis Capital in Palo Alto, California. That means they're not as able to fall back on their own ingenuity to fuel growth. More businesses are relying on acquisitions to find their next new product or service, he said.
"The product cabinet is bare, but the market continues to move forward," Ackerman said. "Wherever you see innovation sprint ahead, companies will have a product deficit, and will look to fill it."
Google, based in Mountain View, is currently one of California's most acquisitive companies, buying at least five businesses in 2010. It agreed to buy Picnik last month, acquiring online photo-editing tools. Its purchase of DocVerse provided it with software that lets people share documents over the internet.
