Google (NASDAQ:GOOG) is one of the most active players in the tech M&A space. Last week, it made yet another major acquisition, Meebo, which started out as multi-platform chat client but pivoted to become a social toolbar and advertising platform. This is precisely why Google was interested in Meebo, given its focus on social and advertising. Google reportedly shelled out $100 million to buy out Meebo. And with this new acquisition, Google hopes to have a better shot at taking down Facebook (NASDAQ:FB), which currently rules the social space, though we wouldn’t completely bet on that just yet. 
Meebo’s flagship product, the Meebo Bar, enables website owners to share content on social networking sites and save it. It also enables them to monetize traffic by displaying ads within the toolbar. Since the Meebo Bar already has a huge installed base, Google could leverage that to drive the usage of Google+.
We expect Google to integrate Meebo’s services into Google’s own social offerings. The search giant could also use the data and analytics generated by Meebo’s user base to improve its ad targeting using social indicators. Overall, the acquisition seems to offer a lot of synergies to Google, and there are a very few companies that could have been a better fit for Meebo.
Socially targeted advertising is where all the action is expected in the next few years, and that’s the reason why Facebook is valued so highly. Google, which dominates search advertising, wants to be part of this action given how lucrative the potential market is.
We currently have a $680 Trefis price estimate for Google, which stands nearly 15% above its market price.Notes: