6 ms·
What Could You Buy for $8.5 Billion?
- rudiger 15y agoIn 1997, Microsoft rescued Apple with a $150 million investment just so that Apple could survive as a viable competitor. http://www.apple.com/ca/press/1997/08/AppleMicrosoft.html http://www.apple.com/ca/press/1997/08/AppleMicrosoft.html
- deleted 15y ago[deleted]
- haentz 15y agoActually this might haven been the worst investment MS ever did…
- j79 15y agoThe problem with the "$150 million investment saving Apple" argument is that Apple had $1.2 billion cash on hand. Personally, I think it was Microsoft's commitment to keep Office for Mac (as well as building/bundling IE for Mac - which at the time, was a damn good browser!) that "rescued" Apple to a certain degree (it definitely made it a viable machine for the education market!) Honestly though, I think after Steve Jobs returned and killed off the clones (and released the new iMac), Apple would have succeeded (or at least, not "died") even without Microsoft's investment --- mostly due to how loyal the users are. No clue how successful they would have been though, without IE/Office (I doubt MS would have killed Office though - considering it was still generating cash for them...)
- berntb 15y agohttp://news.ycombinator.com/item?id=2460925 http://news.ycombinator.com/item?id=2460925
- tzs 15y agoAs others have pointed out, Apple had a giant stash of cash. $150 million was small change to Apple at the time. It is widely speculated that this deal was really a settlement over the alleged infringements in Windows of Apple's IP. Microsoft pays Apple $150 million, disguised as a face saving investment, and agrees to keep Office on the platform for a few years, and Apple doesn't sue the crap out of Windows.
- pchristensen 15y agoSpoiler alert - Apple's market cap was $7.5 billion 2004.
- dstein 15y agoExcept if Microsoft had bought it, it would not be worth even that much today.
- orijing 15y agoI wonder if Skype acquisition will follow the same fate
- meroliph 15y agoThe same assumed fate?
- yannickmahe 15y agoMicrosoft would probably worth more than currently however.
- coryl 15y agoWouldn't MSFT would have had to pay a premium on the market value per share? So upwards of 120% of market price?
- irrelative 15y agoObviously this isn't meant to be taken seriously, but you could never buy a company for it's market cap. Shareholders wouldn't agree to an acquisition where they make exactly what they have now. Also, you couldn't just buy up a ton of shares of stock either with the whole supply-demand curve of shares. If you buy 1% of Apple's shares, the share prices isn't going to just hover around the original price.
- jessedhillon 15y agoEntire text of TFA follows: --START-- http://ycharts.com/companies/AAPL/market_cap http://ycharts.com/companies/AAPL/market_cap For just $7.5 billion, you could have bought Apple — in January 2004. That leaves $1 billion to create your time machine.
- recoiledsnake 15y agoThat deal would have had a snowball's chance in hell of getting the regulatory approval in US & EU.
- jjcm 15y agoI dunno, after seeing the FCC commissioner get hired by Comcast, it may very well be Dante's hell.
- michaeldhopkins 15y agoIf this were Dante's hell, ex-Commissioner Baker would either be boiling in pitch, burned alive or frozen in Cocytus.
- eli 15y agoThe DoJ under Bush was extremely lax in its enforcement of antitrust rules. EU, on the other hand...
- rokhayakebe 15y agoWould it be smarter to go the future and come back to buy stocks from the next Apple-Google-Facebook, or go to the past and buy early Apple stock?
- kenjackson 15y agoIf I have a time machine I hope I'm doing a bit more than buying stock in tech companies.
- wcgortel 15y agoThe present value of your efforts at time 0 (the present) would be much higher if you bought apple in time -15 and then returned to the present than if you spooled off a bunch of stock market history at time 15 and then returned to time 0 and dutifully executed your trades. Of course, it would probably be easier to pull off the second approach (a-la back to the future 2) than the first, since opening a brokerage account in time -15 would likely cause unwanted contact with your past self. You also run a chance of your past self discovering your plan and fooling about with it in time -14.9 - 0. I guess that lowers your expected value by a figure that depends on your probability of being caught. At the end of the day, it's probably less of a headache to just buy an index fund.
- kmfrk 15y agoIt's a weird thought experiment; $7.5B adjusted for inflation from 2004 to today would be ~$8.9B. (18.3% inflation.)[1] By this logic, Gruber would still be short of money. [1]: http://www.usinflationcalculator.com http://www.usinflationcalculator.com (or any other inflation calculator).
- bostonpete 15y agoYeah, it's only 13.3% growth over 7 years, which ends up being ~1.8% growth in market share per year. Seems pretty small considering their success in recent years... Edit: OK, I'm a dumbass -- I misunderstood the comment and didn't realize there was a link to click through to the chart there.
- bigwally 15y agoSkype. :)
- recoiledsnake 15y agoYou know what you could buy for $1 ten days ago? The winning lottery ticket for one million dollars in yesterday's draw.
- pstack 15y agoFor 8.5 billion, you could hire a couple dozen of the highest class escorts forever and travel the world in a super-yacht with them for sixty years. Or you could pay a ton of people that you hate the most a dollar per hit to punch themselves in the face for a year straight. Or you could build your own Skype service from scratch and have about $8,499,500,000 left over to maintain and market it.
- meterplech 15y agoYeah, but how much would you have to spend to get 500 million users, many of which you already have credit card information for? Not saying this acquisition was necessarily worth the cost at all- but it wasn't just about the technology.
- guygurari 15y agoPay each user who signs up and uses your service $10. You'd still have $3.5 billion in change.
- mikle 15y agoThis seems like a sustainable business plan :)
- incomethax 15y agoIf only user acquisition costs were that low...
- pstack 15y agoWhere are these 500 million users? Do you mean the Skype user base? Skype has 170 million users. Of those, only 1% actually pay for the service. So you're probably paying for 1.7m people's credit card information and accounts. Or do you mean 500 million Microsoft users? (Not being an ass, I honestly wasn't clear which users who were referring to in the process here.)
- meterplech 15y ago
- raganwald 15y agoIf Microsoft does spend a billion on a time machine, my advice would be to buy Apple's 2006 stock and hold it in trust. I have zero confidence that Microsoft in 2006 or in 2011 could buy a disruptive company and not destroy it. Which is, I think, the arch point of Gruber's quip. If Microsoft had bought Apple in 2006, does anyone seriously think Microsoft today would have a dominant position in phones, music players, music distribution, and tablets? Would it have a world-class retail chain? Moving forward to 2011, people point out that B$8.5 could buy a lot of startups. Assuming that they could identify it, Microsoft probably could buy the next Apple or Google. Heck, they could probably buy it just by trying to buy everything. But does anybody seriously think that if Microsoft does buy the next big disruptive company, it would still be the next big disruptive company?
- Apocryphon 15y agoAren't there controls in place to prevent companies from buying up each others' competitors' stock?
- raganwald 15y agoThere are certain anti-monopolistic laws in place. You might need to put a hundred million aside for lawyers and lobbying to get your deal past the regulators. But given patience and money and a willing seller, I'm sure Microsoft could buy anyone and find a way to get the deal approved. We are talking about a world where Adobe can buy anyone it likes just to kill off their competition.
- pragmatic 15y agoMsft couldn't have bought Apple. They needed to have plausible competition in the desktop market to avoid monopoly regulation, etc. There's a good chance Apple wouldn't exist without Microsoft (and vice versa): http://en.wikipedia.org/wiki/History_of_Apple_Inc.#Microsoft_deal http://en.wikipedia.org/wiki/History_of_Apple_Inc.#Microsoft... Without Office, etc on Mac the adoption could have been severely limited. Would Apple have had the cash to develop the iPod? I think of them as competitive symbiotes. Together they are more valuable than the sum of the parts.
- ChuckMcM 15y agoIts fun to read these sorts of things, back in the day when I was at Sun and Sun had taken a billion dollars of VAX business away from DEC there was a similar article about what DEC could have bought with that missing billion dollars in revenue. A hallmark of a successful business is that it generates enough cash that you can step into adjacent markets. The down side is the risk to your focus if the adjacent market it too off axis.
- code_duck 15y agoThis is daringfireball? Well, you could buy Apple stock, iPads, iPods, MacBooks, movies and songs on iTunes, AppleCare packages, Mac Pros, iMacs, Mac accessories, and iOS apps. Nothing else is worth buying. Oh, oops. Read the 'article'. My joke is more accurate than I thought.
- deleted 15y ago[deleted]
- PetrolMan 15y agoAm I the only one that can't read a daringfireball post without cringing? Feels like a cultist's blog.
- smackfu 15y agoFor perspective and comparison, MSFT paid a $32 billion dividend to shareholders in 2004. With their cash on hand, they could have bought 4 AAPLs. They currently pay out around $5-6 billion in dividends per year. AAPL pays out $0. http://luhman.org/blog/2004/07/23/dividend-capture-and-microsofts-msft-one-time-dividend-3-share http://luhman.org/blog/2004/07/23/dividend-capture-and-micro...
- loumf 15y agoPaying a dividend is what a company does if it thinks it cannot invest the money better than its shareholders could. Apple thinks it can make good use of billions of dollars and Microsoft thinks you can do better with the dividend.
- smackfu 15y agoIt doesn't seem like Apple really has a plan for it's pile of cash. They just don't want to pay a dividend and they don't want to buy back stock and they don't want to acquire much so it just keeps building up.
- ikono 15y agoPeople here need to lighten up. It was a joke...
- keefe 15y agoa bunch of companies working on life extension
- awa 15y agoOoh.. I can play this game too. I guess Apple/Google could have bought Facebook for a few million dollars in 2004.