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Talaria in Google's Kitty

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Internet search giant Google Inc. has acquired an infrastructure startup company, Talaria Technologies for an undisclosed sum to boost its cloud offerings.

Palo Alto-based, Talaria Technologies was founded by Austin Robison in 2011. It develops web application servers that add support and scalability to some of the most popular websites. After the acquisition, the Talaria team will become a part of Google’s Cloud Platform team.   

Talaria claims that its technology increases the efficiency of websites by allowing developers to use easier, high-productivity languages like Python and Ruby with the scalability advantage of a compiled language.

Facebook (FB - Free Report) is also doing a similar exercise by removing its existing PHP code with Hip Hop, which easily transforms codes. This exercise is expected to reduce its hardware costs and boost its applications. Inc. (AMZN - Free Report) was one of the major pioneers of cloud computing. It modernized its own data centers and launched a cloud-computing business for external customers called Amazon Web Service (AWS) in 2006. Recently, Microsoft (MSFT - Free Report) also acquired cloud-monitoring startup MetricsHub to boost its cloud-based services.

Google’s acquisition may prove to be beneficial for the search giant, as the apps hosted on the Google cloud platform may now perform more efficiently. With Talaria’s technology, Google can run the apps using less hardware, thus giving it a cost advantage.

IDC predicts that the cloud market may grow 130% to $43.0 billion by 2016. Further, Gartner predicts that around $677.0 billion may be spent on cloud services within the 2013–2016 timeframe. Thus, Google should be able to tap this opportunity, which may boost its top-line going forward.

In the fourth quarter of fiscal 2012, Google’s gross revenue (including TAC) touched a record $14.4 billion, representing sequential and year-over-year increases of 2.3% and 36.2%, respectively. Excluding the $1.5 billion contribution from Motorola, revenues were up 21.9% from the year-ago quarter.

Google has a Zacks Rank #3 (Hold).

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