In Silicon Valley, Mergers Must Meet the Toothbrush Test

When deciding whether Google should spend millions or even billions of dollars in acquiring a new company, its chief executive, Larry Page, asks whether the acquisition passes the toothbrush test: Is it something you will use once or twice a day, and does it make your life better? Page is looking for usefulness above profitability, and long-term potential over near-term financial gain. Google’s toothbrush test highlights the increasing autonomy of Silicon Valley’s biggest corporate acquirers -- and the marginalized role that investment banks are playing in the latest boom in technology deals.