Google isn’t afraid to shell out a boatload of cash for the right acquisition. Just ask the smart thermostat company Nest, which it bought earlier this year for $3.2 billion.
In 2014 alone, Google has already made upward of 20 acquisitions.
According The New York Times’ David Gelles, CEO Larry Page uses the “toothbrush test” to determine whether a company is worth buying. He’ll ask, “Is this something you will use once or twice a day, and does it make your life better?”
Instead of diving into the nitty-gritty of cash flow and earnings, Page cares about usefulness and long-term investment and benefits. Nest might not be reeling in a ton of money right now, but Google sees it as an entry point to a potentially gigantic new market.
Read more: Business Insider