Why Google Should Consider Buying Tesla

Why Google Should Consider Buying Tesla
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The electric car manufacturer Tesla Motors Inc (NASDAQ:TSLA) has been a big grower in terms of both prominence and stock price over the last couple of years. This hasn’t prevented many short sellers from betting against it, but by the same token this negative sentiment hasn’t stopped Tesla from continually defying their critics.

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Tesla seeking possible tech buyout?

Recently, the CEO of the company, Elon Musk, met with executives from Apple Inc. (NASDAQ:AAPL) for a meeting – the reason for which has yet to be disclosed. Indeed, we may never find out why this meeting took place. But with Apple having a penchant for acquisitions when it suits them, speculation immediately began that the consumer electronics manufacturer was either intending to buy out Tesla or engage in some sort of car producing collaboration.

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This has been fiercely denied thus far. But while Apple Inc. (NASDAQ:AAPL) may not be interested in purchasing Tesla Motors Inc (NASDAQ:TSLA), there is another major tech company that it could be argued stands to gain much more than Apple from contemplating a buyout.

Google Inc (NASDAQ:GOOG) is one of the most highly market-capitalized firms in the world, and its core business would seem to be completely untouchable for now. Their search engine produces trillions of results every month, and is undoubtedly the most visited website in the world. This generates the company a huge amount of revenue in itself, and while Google has branched out into many other areas, one cannot deride the success of its search engine and the related business model.

Nevertheless, with an obvious rival to Google Inc (NASDAQ:GOOG) such as Facebook Inc (NASDAQ:FB) having acquired WhatsApp last week for $19 billion, there is a certain pressure on Google to respond. Evidently, Facebook has decided by making this extremely expensive buyout (1,900% more than Facebook had ever spent on any previous acquisition) that it needs to own its own social space now, presumably so that it can develop it before rivals make similar plans.

A huge, untapped market for Google

Regardless of whether or not Google Inc (NASDAQ:GOOG) can similarly dominate the mobile strata as it has with desktop searches, the company evidently needs a growth area in the future. And the motor trade could be the perfect solution. In 2013, the worldwide auto market was worth around $2 trillion; the sort of figures that would interest Google, although entering the marketplace does post obvious logistical problems. This is a highly established industry that is comprised of some huge and extremely experienced players.

However, the same cannot really be said of the electric car industry. Although Tesla Motors Inc (NASDAQ:TSLA) has established itself as a fairly large company, its sales are still dwarfed by the biggest auto companies in the world. And it has no real rivals at this point in time. Audi has indicated its intention to release an electric car, but the road ahead is pretty clear for Tesla aside from that.

Google Inc (NASDAQ:GOOG) could bring obvious technological experience to the table, as well as an established and unequaled research department that could provide real innovation to Tesla Motors Inc (NASDAQ:TSLA)’s products. Google would seem to be the ideal company to deliver improved car batteries; a product that will surely become increasingly important in the coming years. And there is little doubt that electric car manufacturing is a growth industry.

Acquiring Tesla Motors Inc (NASDAQ:TSLA) could really pay off for Google Inc (NASDAQ:GOOG) in the long-term.

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