Eric Schmidt has been interviewed for Time Magazine and goes into some detail on partnerships, particularly for Google, which has a very narrow base of operation for such a large company. “… we tried to pick partners that represented different initiatives that we wanted to work with for a long time.”

It’s in the secondary growth period that the need for new talent becomes irresistible :

“I think that to some degree when you’re a small company you sort of have to do everything yourself, and as you get more established you begin to realize you’ll never get everything done by yourself. You’re fundamentally going to be a better player, a better solution, if you can share in the success, and get the benefit of the hard work these other people have done.”

Essentially, Schmidt recognizes that it’s a matter of distribution, of reach towards new customers. “In most cases what I’m describing is distribution: they have a way of reaching customers that we do not on our own. And also the combination solves a new problem.”

Finance is not the central issue here, as it is with venture capitalists : “So it wasn’t particularly financial, although the financials are all good in these deals, it was really more reach; distribution. It was really strategic. My point is you don’t just do partnerships to do partnerships. You do partnerships for a reason.”