This case describes Google's decision in November 2009 to purchase mobile advertising start-up AdMob in a cash-and-stock deal valued at $750 million. The objectives of the case are: to highlight the role of acquisitions as integral to Google's growth strategy; to explore the extent to which the perception and pricing of Google as a growth stock necessitates the continual search for new growth opportunities; to determine the drivers of growth in the online advertising market and different segments within that market; and to navigate the considerable challenges of valuing a potentially high-growth start-up both as a stand-alone firm and as an acquisition target.

The objectives of the case are:

1. to examine how the perception and pricing of young technology companies such as Google impact management’s search for new and growing product markets;
2. to highlight the role of acquisitions in Google’s growth strategy;
3. to determine the drivers of growth in the online advertising market and different segments within that market; and
4. to navigate the considerable challenges of valuing a potentially high-growth start-up both as a stand-alone firm and as an acquisition target.

This case can be used in either an undergraduate or graduate finance case course and can be completed in a two-hour class session.