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Google Considering Private-Equity Alliances

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Google Inc. (GOOG), actively on the lookout for acquisitions, is for the first time considering forging alliances with private-equity firms to help it structure deals.

Buyout firms can assist an acquirer by providing needed financing or advice on how a target could be restructured or carved up after a deal closes. While Google may invest cash to get a return on the investment, it may also take part in a deal to acquire an asset, said Don Harrison, Google’s mergers and acquisitions chief.

Google, seeking to boost sales through acquisitions, uses an approach it dubs the “toothbrush test” to assess how frequently a potential target is used by consumers, Harrison said in an interview yesterday at the Bloomberg Next Big Thing Summit in Half Moon Bay, California. The company, operator of the world’s most popular search engine, is closing deals at a pace of about one every other week, he said.

“We apply something called the toothbrush test, which is we ask ourselves, ‘Is this something people use once or twice a day and does it solve a problem?’” Harrison said in televised remarks.

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