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April 01, 2013

Google buys B&H Photo, tasks them with building Android brick and mortar stores

This was an April Fool's Day 2013 post, available after the jump...


We are at the start of a new quarter for most companies and the start of a new fiscal year for some, so we have plenty of news today. On the Mergers and Acquisitions front, we have some big news and perhaps surprising news from Google. They have purchased world-renowned New York photography and electronics specialty retailer B&H Photo.


Why?
Google's reasoning behind this purchase is this: Google needs to develop brick and mortar stores around the world to compete with Apple and Microsoft stores. Everyone is building advanced stores these days, even cellphone and cable TV providers are moving towards more advanced stores these days.

The problem for Google is this: Google is full of geeky engineers who are not particularly good at interfacing with end customers or understanding the needs and priorities and emotions of a "normal person". So Google badly needed real-world experience in order to get the brick and mortar project right the first time and make a big splash.

The importance for Google having their own consumer-facing real estate cannot be overstated. Android will be center stage but it's not just Android anymore. Google is also pushing hard to have their Chromebooks adopted both in education and by the general consumer as an "internet appliance". Google is also generating a lot of buzz with Google Glass. They would need a way for the average consumer to try Google Glass in a safe and controlled environment, on Google's terms. Demo stations at those big-box shiny-floor ammonia-smelling chain-stores are not exactly a good way to get a customer to fall in love with your product.

In addition to the above, Google is also involved with many other consumer-centric projects, including Google TV and their super-fast potentially telco-killing Fiber Internet Service, currently available in Kansas City as a pilot project. All these would benefit significantly with a professional brick and mortar service.


Compromises
As you may be aware, B&H Photo is a privately held company, Google couldn't just buy them because they wanted to. Google had to persuade B&H that the deal would be beneficial in order to close the deal. B&H Photo was able to negotiate this with Google: the B&H Photo business in New York will continue to operate as usual, without interference from Google HQ. At the same time, a select team of B&H Photo experts will interface with Google HQ and spearhead the project of developing the real-world brick and mortar stores. The terms of the agreement also give B&H Photo the power to become completely independent from Google under certain conditions and situations.


The Seed
According to our source, the seed for this was planted during the early days of Android. As you may recall, Google co-founder Sergey Brin is a big fan of photography. During one of his trips to New York City, he stopped by B&H Photo to check out some new lenses. One thing led to another, and the conversation shifted to Android, and Brin looked up and around the store and said, "I want this for Android".

According to another source, this picked up momentum in recent months and the tipping point for a mutually beneficial agreement was reached in January 2013 when Sergey Brin was in New York.



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