What is the logic behind FANG companies doing acquisitions?

Question

There was a recent rumour in the news about Google making an offer to buy Wiz for 23 billion dollars, and an incredible (perhaps BS) story of Wiz turning it down.Now, for some acquisitions such as WhatsApp/Instagram that have a ridiculous number of users pre-acquisition, it makes sense. You can't assuredly build that sort of product-market fit on the first go .. so buying it when others have achieved it makes sense. But cloud security??? Google already has smart engineers and supporting professionals .. couldn't they just match Wiz's features? I don't get how such a big acquisition was even on the table.P.S. After the CloudStrike incident, I really wonder how this whole space will evolve. Wonder if that threw a wrench in the Wiz-Alphabet story.

dave4420 · Accepted Answer

Sure, Google could build it themselves in a year or two, or they could buy it and have it now.Also&hellip; there are selection effects here. Google can build it themselves, but would it be as good as what Wiz have already built? If Wiz wasn&rsquo;t good, they wouldn&rsquo;t have considered buying them.

nness · Answer

I think you answered your own question &mdash; they're not buying capability, they're buying enterprise customers.

What is the logic behind FANG companies doing acquisitions?

Sure, Google could build it themselves in a year or two, or they could buy it and have it now.
Also… there are selection effects here. Google can build it themselves, but would it be as good as what Wiz have already built? If Wiz wasn’t good, they wouldn’t have considered buying them.

I think you answered your own question — they're not buying capability, they're buying enterprise customers.