It’s been 20 years to the day since Google made what you might consider its “best deal ever” by acquiring a small, unknown startup called Android, Inc. The founders, Andy Rubin and Chris White, had first set out to build an operating system for digital cameras, but when they failed to attract investors in 2004, they pivoted to creating a mobile operating system, and went pitching their new project looking for investor support. Google’s Larry Page saw the signs of a bigger project, and instead of investing in Android, Google struck a $50 million deal to buy it on July 11, 2005.
On paper, the deal seemed so minor. For comparison’s sake, Google bought Motorola for $12.5 billion (billion not million), Nest for $3.2 billion, and YouTube for $1.65 billion. $0.05 billion for Android is a drop in that ocean. But it was a defensive masterstroke by Google. The company recognized that the computing market was moving to mobile and if it didn’t control a mobile operating system, a competitor could use their platform to de-prioritize Google’s search and ad business. That’s where the money has always been for Google, so losing that wasn’t in the cards.