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A public company like Walmart, there's some people doing some math here. http://www.zdnet.com/article/yahoo-reports-another-big-loss-and-tumblr-write-down/

A public company like Walmart, there's some people doing some math here. http://www.zdnet.com/article/yahoo-reports-another-big-loss-and-tumblr-write-down/ http://www.zdnet.com/article/yahoo-reports-another-big-loss-... Yahoo also reported that it's writing down $482 million in charges related to the declining value of Tumblr, the social-blogging service that Yahoo acquired for $1.1 billion in 2013. http://www.theverge.com/2015/7/8/8910999/microsoft-job-cuts-2015-nokia-write-off http://www.theverge.com/2015/7/8/8910999/microsoft-job-cuts-... and the company is writing off $7.6 billion related to its acquisition of the Nokia phone business. That's more than the $7.2 billion Microsoft paid for Nokia's phone business last year. Public companies "do some math", but that doesn't mean their math is always right. Acquisitions are bets, and bets don't always pay off.

deleted 10y ago
[deleted]
coryfklein 10y ago
It seems you're pointing out the obvious: that no investment 100% guarantees any sort of return. Surely "the math" discussed internally at Walmart includes both: 1) A calculation of risk/reward on this investment 2) Determining whether result of 1 appropriately reflects Walmart's risk profile. Given that Walmart decided to acquire, it is safe to assume this investment's risk of loss falls within Walmart's investment profile.
mark-r 10y ago
My own observation is that the bets hardly ever pay off. Microsoft/Nokia is a great example but there are plenty of others. Maybe it's just confirmation bias, but I have trouble thinking of one counter example.
- hayksaakian 10y ago
  adsense
- matt4077 10y ago
  NeXt. Paypal. iTunes. Maybe Skype
  - erichocean 10y ago
    NeXT? Are you kidding? Apple has done nothing but _loathe_ buying NeXT and their mercurial CEO. Huge waste of money. /s
- rogerdpack 10y ago
  Adobe did buy AEM "when i was little" (you know, for like 20M or something I have no idea) and it has grown to 10x as much. However that is purchasing a smaller company...kind of like venture capital investment I guess. there seem to be plenty of examples where buying companies hasn't worked out (yahoo+tumblr comes to mind, and that's only recent news).
  - mark-r 10y ago
    Sorry, not familiar with the acronym AEM. But you do give me an opportunity to modify my statement - it seems that the larger and more strategic the acquisition seems, the more likely it is to fail. And even when it doesn't fail, the synergies never seem to gel - what news of Zappos lately?

deleted 10y ago

[deleted]

coryfklein 10y ago

It seems you're pointing out the obvious: that no investment 100% guarantees any sort of return. Surely "the math" discussed internally at Walmart includes both: 1) A calculation of risk/reward on this investment 2) Determining whether result of 1 appropriately reflects Walmart's risk profile. Given that Walmart decided to acquire, it is safe to assume this investment's risk of loss falls within Walmart's investment profile.

mark-r 10y ago

My own observation is that the bets hardly ever pay off. Microsoft/Nokia is a great example but there are plenty of others. Maybe it's just confirmation bias, but I have trouble thinking of one counter example.

hayksaakian 10y ago
adsense
matt4077 10y ago
NeXt. Paypal. iTunes. Maybe Skype
- erichocean 10y ago
  NeXT? Are you kidding? Apple has done nothing but _loathe_ buying NeXT and their mercurial CEO. Huge waste of money. /s
rogerdpack 10y ago
Adobe did buy AEM "when i was little" (you know, for like 20M or something I have no idea) and it has grown to 10x as much. However that is purchasing a smaller company...kind of like venture capital investment I guess. there seem to be plenty of examples where buying companies hasn't worked out (yahoo+tumblr comes to mind, and that's only recent news).
- mark-r 10y ago
  Sorry, not familiar with the acronym AEM. But you do give me an opportunity to modify my statement - it seems that the larger and more strategic the acquisition seems, the more likely it is to fail. And even when it doesn't fail, the synergies never seem to gel - what news of Zappos lately?