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Instant Analysis: Alphabet's Google Acquires Pie

By Evan Niu, CFA - Feb 18, 2016 at 12:15PM

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Google expands its position in Singapore, looking to be closer to the action.

What happened?
Alphabet's (GOOG 0.19%) (GOOGL 0.33%) Google has announced that it is opening up an engineering office in Singapore as it further expands into Asia-Pacific markets. As part of this effort, the search giant has acquired Pie, a Singapore-based start-up that offers enterprise chat services similar to Slack.

Pie was founded just three years ago as an enterprise messaging platform helping teams collaborate and even "share cat pics and invent new memes during office hours." Pie will continue operating independently for a couple more weeks before shutting down on March 2. Until then, existing customers can download all of their data such as chats, files, and contacts in order to migrate to another platform.

Does it matter?
This small deal is an acqui-hire, plain and simple. It should be pretty clear since it was announced as part of a broader plan to grow engineering talent in the region. Google is also actively hiring students from Singapore that want to pursue engineering careers at the company.

Like many other tech giants, Google is focusing very heavily on the next wave of people that are about to come online. Citing a UN statistic, Google says 2015 saw 300 million new netizens come online for the first time, which is nearly the population of the U.S. Many of these new Internet users are coming from Asia-Pacific, so Google wants to expand its presence closer to where this user growth is being generated. The company chose Singapore because it is "hyper-connected" and enjoys extremely high Internet speeds.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Evan Niu, CFA has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares) and Alphabet (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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