Google: Merge Ahead

PITTSBURGH (TheStreet) -- Internet giant Google(GOOG Quote) is preparing to hit the M&A trail, according to CEO Eric Schmidt, providing further evidence of the tech recovery.

Speaking at a green technology event on the fringes of this week's G20 summit, Schmidt told Reuters that acquisitions are "turned on again" and that he expects to do one small deal a month instead of hiring new staff.

The Google chief, who is also an adviser to President Obama, also believes that the worst of the recession is over and is seeing economic improvement both inside and outside the U.S.

As for M&A, the former Novell(NOVL Quote) CEO said that larger deals are also possible. "There may be larger acquisitions, but they really are unpredictable," he said.

Confronted with a major slowdown in Internet-based ad spending, Google is throwing open its coffers to bring in additional revenue.

There has already been speculation that Google is eyeing video specialist Brightcove, and Schmidt recently spent $106.5 million to acquire video compression company On2.

The On2 deal was not the firm's first foray into the video space. Google spent a whopping $1.65 billion to acquire YouTube in 2006, although a major question mark still hangs over its ability to turn the video sharing phenomenon into a profit machine.

It is not just video and search, however, where Google is facing stiff competition. The Mountain View, Calif.-based firm has entered Apple's (AAPL Quote) sphere of influence through its Android and Chrome operating systems. Schmidt, for example, recently stepped down from Apple's board of directors, highlighting the increased competition between the two firms.