SketchUp Is Google’s First Divestment Ever, And It Made A Profit

SketchUp - Google's First Divestment

Google’s sale of a previously purchased arm of the company this morning, 3D modeling software SketchUp to Trimble, isn’t just something it does “every now and again”. It’s actually Google’s first divestment ever, according to two sources, and we’re hearing the search giant made a profit, as it sold SketchUp for more than it bought it for back in 2006.

This could signal a sea change in how Larry Page executes his vision for a leaner, more focused Google. The company frequently shuts down extraneous products, but that requires redistribution of their team members internally. If it’s now willing to sell them instead, Google could streamline around the theme of making user’ lives more convenient, while making some money at the same time.

It wasn’t that SketchUp wasn’t working. It had 30 million activations since joining Google as part of @Last Software in March 2006. But it just didn’t fit with the direction Google is heading in. It’s a relatively niche product for architects and the construction industry, game developers, and film makers. It doesn’t fit with last years theme of inherently social product that could be tied to Google+, or this years plan to simplify everyone’s lives.

So rather than sink it in the deadpool, Google sold it to someone that can actually use — Trimble, a mapping, surveying, and navigation equipment company. Analysts speculated that Google paid $45 million for SketchUp in 2006. As Trimble called the acquisition of the product “immaterial”, and therefore less than 5% of its annual revenue, it couldn’t have paid more that $90 million for it. That would mean Google could have made up to $45 million in profit on the sale, though its likely closer to a few million.

Early this year Google shut down its photo editor Picnik and open sourced its Android stargazing app Google Sky Map. If the company had to do it again, maybe it’d sell them off instead.

This strategy of divesting successful but outlying products meshes with why we’ve heard Google didn’t buy Instagram. While initially vaguely interested in buying the photo sharing service, we hear Google walked away before talks went past the coffee table stage. That’s because buying Instagram for a high price just to fracture focus by running it independently didn’t align with Page’s game plan.

I often hear that headcount bloat and disorganization in the ballooning Google disgruntles employees and makes them flee for startups. The inefficient bureaucracy, lost transition time , and expensive counter-offers it has to make to get talent to stay are running up costs for Google while slowing it down. While no one wants to see their co-workers shipped out of the Googleplex, it may be wise for Google to sell the meat instead of just trimming the fat.

[Additional reporting by Alexia Tsosis and Rip Empson]


SketchUp Is Google’s First Divestment In Years, And It Made A Profit

SketchUp - Google's First Divestment

Google’s sale of a previously purchased arm of the company this morning, 3D modeling software SketchUp, to Trimble, is its first divestment in years, and according to sources the search giant made a profit, as it sold SketchUp for more than it bought it for back in 2006.

This could signal a sea change in how Larry Page executes his vision for a leaner, more focused Google. The company frequently shuts down extraneous products, but that requires redistribution of their team members internally. If it’s now willing to sell them instead, Google could streamline around the theme of making user’s lives more convenient, while making some money at the same time.

It wasn’t that SketchUp wasn’t working. It had 30 million activations since joining Google as part of @Last Software in March 2006. But it just didn’t fit with the direction Google is heading in. It’s a relatively niche product for architects and the construction industry, game developers, and filmmakers. It doesn’t fit with last year’s theme of inherently social product that could be tied to Google+, or this year’s plan to simplify everyone’s lives.

So rather than sink it in the deadpool, Google sold it to someone that can actually put it to use — Trimble, a mapping, surveying, and navigation equipment company. Analysts speculated that Google paid $45 million for SketchUp in 2006. As Trimble called the acquisition of the product “immaterial”, and therefore less than 5% of its annual revenue, it couldn’t have paid more that $90 million for it. That would mean Google could have made up to $45 million in profit on the sale, though its likely closer to a few million.

Early this year Google shut down its photo editor Picnik and open sourced its Android stargazing app Google Sky Map. If the company had to do it again, maybe it’d sell them off instead.

This strategy of divesting successful but outlying products meshes with why we’ve heard Google didn’t buy Instagram. While initially vaguely interested in buying the photo sharing service, we hear Google walked away before talks went past the coffee table stage. That’s because buying Instagram for a high price just to fracture focus by running it independently didn’t align with Page’s game plan.

I often hear that headcount bloat and disorganization in the ballooning Google disgruntles employees and makes them flee for startups. The inefficient bureaucracy, lost transition time , and expensive counter-offers it has to make to get talent to stay are running up costs for Google while slowing it down. While no one wants to see their co-workers shipped out of the Googleplex, it may be wise for Google to sell the meat instead of just trimming the fat.

[Update: The SketchUp sale is not Google's first divestment ever as previously stated, but the first since 2009 when Google sold off some assets of Google Radio Automation to WideOrbit. Alexia's sources familiar with the matter missed the mark on this one.]

[Additional reporting by Alexia Tsotsis and Rip Empson]


A Rare Sale: Despite 30 Million Activations In The Last Year, Google Sends SketchUp To Trimble

Screen shot 2012-04-26 at 12.16.00 PM

At this time of year, we usually find ourselves reporting on Google breaking out the brooms for a little spring cleaning. Last week, Google again proved seasonally reliable, as Frederic reported on its shuttering of Google Patent Search Homepage, One Pass, Google Related, and a number of other features and products. CEO Larry Page said in his “Update From The CEO” earlier this year that Google has shuttered or combined 30 products since April 2011.

Google is prolific when it comes to its in-house production, churning out new ideas and products all the time, and the company isn’t afraid to pull the plug if the idea doesn’t pan out. But this morning Google pulled a relatively unusual move, announcing not a closure, or a purchase, but a sale(!).

The product, called SketchUp has become one of the most popular 3-D modeling tools in the world, with over 30 million activations of the program in 2011. And today, Google announced that the SketchUp team and technology will be leaving the Google campus to join Trimble Navigation, for an undisclosed sum.

Since then, SketchUp has lived at Google, undergoing a number of upgrades, and growing exponentially thanks to Google’s sizable reach. Yet, it’s hard not to see Trimble as a great fit for SketchUp, considering that Google has its hands full with everything from ads to social networks. Trimble, on the other hand, builds location and positioning technology used in surveying, mapping, construction, agriculture, and marine navigation equipment.

In its post today announcing the acquisition, SketchUp said that Trimble will give its platform a greater opportunity to be integrated into equipment that’s used in the field, and potentially into the hands of those who will really know what to do with it.

In SketchUp’s words, “with Trimble’s commitment to invest in our growth, we’ll be able to innovate and develop new features better than ever before.” And while that’s likely the case, this does seem an intimation that Google wasn’t either willing to or capable of getting the product into the field, or into the hands of that niche, specialized user.

SketchUp said that, in spite of joining Trimble, it will continue to offer the free version of its platform, whose importance to its operations “isn’t changing in the least.” Google helped SketchUp’s technology reach a wide audience of woodworkers, filmmakers, game developers, and engineers — with over 30 million activations — but now it’s Trimble’s turn at the wheel. No word on what SketchUp will be doing with its $495 Pro version, if anything. Stay tuned.

According to Reuters, the acquisition is expected to be finalized in Q2 2012.

For more, check out SketchUp’s blog post here.


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