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Spotlight trained on Google's cash pile

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CIOL Bureau
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SAN FRANCISCO: Google Inc, whose technology helped make sense of the Web's vast trove of data, now faces an equally daunting task: spending its growing cash hoard wisely.

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The Internet search leader's $33 billion in cash and short-term investments, is getting on Wall Street's radar. Some analysts warn that shareholders could become disenchanted if Google does not find good uses for that swelling purse, amid some grumbling about its investments in self-driven cars and wind energy, among other non-Web businesses.

Google is but one of just two holdouts among the 10 largest U.S. technology companies by market capitalization - the other being Apple Inc -  to either not pay a dividend or regularly repurchase its shares. And with Google generating more than $2 billion a quarter in operating cash flow, its stockpile is gaining attention.

Cowen and Co analyst Jim Friedland said "Investors really want to know what Google's strategy is for its huge cash position, at some point, they're going to have to return cash to shareholders or their stock is going to get penalized for it."

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The focus on Google's cash comes as the company emerges from the recession with a renewed appetite for acquisitions aimed at developing businesses outside of search and competing with a new set of rivals, like Facebook.

Google has had discussions with Groupon about buying the fast-growing e-commerce service for as much as $6 billion in what would be its largest acquisition ever, according to the New York Times. And it made an informal offer to buy microblogging service Twitter earlier this year, according to the Business Insider blog.



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