Google, Facebook, Yahoo, Microsoft Etc. Are The New Venture Capitalists

The venture capital industry functions by raising money and investing in start ups.  They hope to take the successful start ups public and get a good return on their investments.  The tech giants are loaded with cash and they are buying up technology start ups with promise.  They don't count on making money by taking them public.  They are becoming conglomerates.  Many of the businesses that they acquire are outside of their primary business which is providing the cash.  This article describes the pros and cons of this transformation.  We have gone through the conglomeration process in the past and it turned out to be a failure.  This time it may be different.  The tech giants may be smarter than the conglomerates that preceded them.  At the very least, they understand the technology better than most people and they are acquiring intellectual capital at a rapid rate.  Intellectual capital may be replacing physical capital as the foundation for modern capitalism.