Well my best guess they need the cash to have a head to head competition with one of its biggest rival and a lot of cash Microsoft. MIcrosoft is a big competitor of Google as well as Yahoo. But while Yahoo is a treat Microsoft is a doble or triple treat. Google and Microsoft are competing in search, search advertising, instant messenging and desktop searching tools. Also there are rumors that G is working on a web browser the so called "gbrowser" If this is true that will be a big fight and Google will need a lot of cash to fight M on this front. Also 11% (220 millions) of total G revenues came from AOL partnership. M is trating that partnership. It had came to the news that AOL and Microsoft are in talk of a posible join venture. They are speculating in a join forces to attract more visitors to thier respective sites. That M provide the search tool to AOL with G currentlly do or even that M will aquire the AOL division at all from Time Warner. Recentlly M CEO told the news that G is the more like them competitors they had fight with. Also they were in court over an employ who left M to join G to work on the China expansion. They will need a lot of cash to fight M on many fronts and more if a join venture between AOL and M become true. M is a big fighter for example while it had not yet overcome SONY in the video game market is doing well. How? It aquiering market share by selling the XBOX below manufacturing cost. They will do the same with the new XBOX 360. Yes they are lossing money in each unit sold. They can afford this because of thier huge cash pile over $30 billions. Thier will do this until they became the dominant player in this market. So if they had to loose money to beat G they will do so and I am pretty sure G knows it thats why $2 billion is not enought.
Thats my opinion  |
