The acquisitions of YouTube and Android are among Google's most important decisions in its history. What were the strategic considerations behind them?

Alright, to explain this clearly, we need to rewind a decade or so and imagine the world at that time.

Simply put, these two acquisitions were about "buying the future" and "buying the market."

First, let's talk about Android: This was about "buying a ticket to the mobile internet"

Around 2005, most people accessed the internet via computers. Google was the undisputed king on desktops; its search engine was the gateway to the internet, and it made a fortune selling ads through this gateway.

However, a trend was becoming increasingly clear: mobile phones.

Everyone anticipated that in the future, people would definitely use phones to access the internet. This presented a fatal problem:

If mobile operating systems (like Windows for PCs) were controlled by others, Google would be finished.

Imagine if, in the future, mobile OSes were dominated by Apple's iOS and Microsoft's Windows Mobile (which was still alive then). They could easily switch the default search engine to their own within their systems, or simply prevent Google's Maps and Gmail apps from being listed. Google would effectively be "choked," and the empire it built on desktops could collapse instantly in the mobile era.

This was a "survival anxiety."

Therefore, Google had to have its own operating system to ensure it would still have an unobstructed "gateway" in the mobile internet era.

At the time, Android was a little-known startup, but Google saw its potential—an open system that could be freely used by all phone manufacturers.

So, the strategic considerations for acquiring Android were:

Defense, survival is paramount: I don't expect to make money directly from the Android system itself, but I must use a free, open system to counter Apple's closed iOS. By offering it for free to manufacturers like Samsung, Huawei, and Xiaomi, we can collectively expand the market, preventing Apple from dominating. As long as the mobile OS isn't controlled by an "enemy," my search, maps, and advertising businesses can continue to thrive on mobile.
Offense, seizing the gateway: Once phone manufacturers adopt my Android system, I can legitimately pre-install the entire "Google suite"—Google Search, Google Maps, Gmail, Chrome browser, and so on. This way, I would shift from passive defense to actively seizing the gateway to the mobile internet.

To put it simply, it's like how everyone used to travel on national roads (PC internet), and Google was the biggest signpost and gas station. Now, everyone is switching to highways (mobile internet), and Google feared that if others controlled these highways, it wouldn't be allowed in. So, it simply paid to build a free highway itself (Android), and then mandated that all service areas and gas stations (search, maps, etc.) along this highway must be its own.

Next, let's talk about YouTube: This was about "buying the future of content formats"

In 2006, when Google acquired YouTube, YouTube was still a money-losing startup. Many people at the time thought Google was crazy to spend $1.65 billion on such a thing.

But Google saw something else: video.

At the time, text and images were the mainstream content on the internet, but video was rising rapidly. People increasingly preferred to "watch" things rather than "read" them. Video's appeal, information density, and emotional connection capabilities were unmatched by text and images.

Google itself had launched Google Video, but it couldn't compete with YouTube. YouTube had already fostered a community culture with numerous original creators and loyal viewers.

So, the strategic considerations for acquiring YouTube were:

Buying the market, not building it themselves: Google realized that video was a new, massive market. It was too late to catch up from scratch in this arena, so the simplest and most efficient way was to directly acquire the leading player (YouTube). This is the "if you can't beat 'em, buy 'em" strategy.
Capturing user time: The essence of the internet is the "attention economy"; whoever can capture more of users' time wins. Watching videos is a huge "time sink," so acquiring YouTube meant acquiring several hours of daily attention from hundreds of millions, even billions, of people worldwide for decades to come.
Extension of the advertising business: Google's expertise lies in selling ads. Video is a much better advertising medium than text-based web pages (think about ads inserted at the beginning or in the middle of videos). YouTube, with its vast video library, provided Google's advertising empire with a new, infinitely potential goldmine.
Perfect integration with the search business: When you search for "how to tie a tie," isn't a video tutorial much more useful than a text-and-image article? After acquiring YouTube, Google Search results became richer and more intuitive, which in turn drove massive traffic to YouTube.

To put it simply, Google noticed that people not only liked to "look up information" online but also increasingly enjoyed "watching TV" online. Its own TV station (Google Video) had no viewers, while the neighboring YouTube TV station was incredibly popular. So, Google simply bought this most popular TV station, gaining not only a massive audience but also the ability to insert its own ads into the programs.

In summary:

The acquisition of Android was to ensure Google wouldn't be "choked" on the "channel" front; it was a strategic defense.
The acquisition of YouTube was to ensure Google would dominate the future "content" landscape; it was a strategic offense.

These two moves—one securing Google's "gateway" and the other capturing user "time"—collectively ensured that Google remained an unavoidable giant from the PC era to the mobile internet era. Looking back now, these two deals were textbook examples of strategic planning.