It's a sentiment rousing entrepreneurs in Silicon Valley: build a start-up compatible with Google Inc.'s (GOOG) business strategy, pick up some venture capital along the way to stay competitive, and sell quickly to the cash-oozing search giant. In the past week or so, Google tossed RSS feed aggregator Feedburner Inc. and server computer start-up Peakstream Inc. into its shopping cart. Both companies were quick exits for their venture backers, especially Peakstream, which raised its first funding round less than a year ago from VC kings Kleiner Perkins Caufield & Byers and Sequoia Capital (two original investors in Google).
For years Cisco Systems Inc. (CSCO) has been the most prolific acquirer of venture-backed start-ups, pocketing 22 such companies since 2004, according to industry tracker VentureOne. But Google has emerged at the top of the list so far this year, acquiring five venture-backed start-ups to Cisco's four. And it's showing no sign of stopping, as the search outfit looks for companies that fit its overarching mission: "To organize the world's information and make it universally accessible and useful." In other words, make money off online advertising, where Google generates 99% of its revenue."