New York City, New York – (StockNewsDesk) – 08/26/2014 — Google has bought Gecko Design, a product design and mechanical engineering company, to join its Google X division, according to a report in the Wall Street Journal.
Google X is Google’s research and development group devoted to the study and development of ideas, products, and projects that are about imagining the future and bringing it to the present. The main purpose of the acquisition was the recruitment of talent to Google Glass and its driverless car projects, two of Google X’s most high profile projects. Some other interesting projects pursued by Google X include smart contact lenses and weather balloons that deliver WiFi to remote areas.
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Gecko Design is an 18 year old engineering firm that has worked on some of the most exciting consumer, electronic devices in recent years. Both Google X and Gecko are praising their union as a synergistic fit. Gecko’s modus operandus is to turn ideas into physical products. Clearly, Google X is recruiting talent to help them turn their visions and ideas of the future into tangible electronic products.
Some of the recent high profile products that Gecko has been involved with include the Fitbit, Jawbone, Logitech, and the One Laptop per Child project. Some of its previous clients included Hewlett Packard, Dell, GoPro, and IBM. They have also worked with some of the top industrial design firms, such as Frog Design and Fuseproject.
The acquisition project came about as a natural extension of collaboration between Google X and Gecko over the past year. Gecko will be a natural fit for Google, as their hardware product design division is quite sparse. For example, while Google Glass has wowed the public, it has not really been a popular item. The biggest culprit has been the poor design of the product, which no one wants to be seen wearing.
In contrast, Gecko has been on the cutting edge of design, coming up with products that consumers want to be seen wearing. A total redesign of Google Glass is not out of the cards, and Google would only consider buying Gecko if something material was on the line. Even prior to this acquisition, Google had been hiring design professionals, even if they were relative newcomers to the tech world.
Most believe that Gecko will be a great fit for Google X, although some potential for clashes between existing design professionals and the new Gecko team always exists. It is expected that the Gecko team will take over the design portion while Google will handle the software; basically, this is how Gecko has been operating for its lifetime.
Stock Price Impact
Although Google’s core search business is thriving, the company continues to work on radical projects that are about finding the next big thing. Of course, with these projects, a low chance of success and potential for high burn rate are always existent. The company is also attempting to battle fellow tech giants on various playing fields – Facebook in mobile advertising, Apple in mobile operating systems, and even Amazon with shopping.
Google’s stock recently passed its 10 year anniversary, and it has grown more than ten times from its initial IPO price. Here is the ten year, monthly chart:
Currently, the stock is about 3% below its recent all time high. With continued earnings and revenue growth at reasonable valuations and growing markets in online and mobile ad spending, the stock should continue higher. Howard Lindzon, a venture capitalist and hedge account manager, describes the search engine giant Google as being the “Internet ETF” and rightly so, as the growth of the Internet will certainly help them.
Here is the six months daily chart of Google:
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I am a graduate in Finance, have been a stock market writer and analyst from last two years. I write for StockNewsDesk on a regular basis providing industry news.