4 ms·
Do acquisitions ever work? Examples? Why?
Do acquisitions ever work? Examples? If you have an example of a success, please feel free to speculate (wildly even) as to why it was successful. I mean this to be a serious question.
[Update: added "Why?" to title]
- methehack 13y agoSo far the successful examples seem to me to be in 2 categories: - a clearly separate product allowed to more or less continue its trajectory, perhaps with some light integration - in google's case, there are a few examples of a piece of core tech that had a clear application to their core business and a clear integration point
- aaronbrethorst 13y agoA few off the top of my head: Microsoft: - Vermeer - Hotmail - Visio - Bungie Google: - Pyra - Urchin - Applied Semantics - YouTube Of course, most of the time they seem to flame out miserably. Microsoft, for instance, took a $6.2bn charge for their Aquantive acquisition. I also once remarked to a couple friends on the Kin team (yes, Kin, remember it?) that Microsoft would've been better off taking $500m in cash to the middle of their soccer fields and lighting it on fire, since at least then it wouldn't have been a huge distraction in the face of launching Windows Phone 7. Google, of course, has a long history of bungling acquisitions (Jaiku, Dodgeball, etc.), too, but their bigger, more strategic acquisitions seem to have worked out far better than the little ones.
- brudgers 13y agoAdd Skype to the Microsoft list.
- aaronbrethorst 13y agoToo soon to tell, I'd say.
- Zhenya 13y agoMint Reddit Android MySpace(I kid)
- methehack 13y agoIn case anyone is wondering, here are the acquiring companies: Quicken << Mint Conde Nast << Reddit Google << Android
- hackinthebochs 13y agoHow has the reddit acquisition worked out for Conde Nast?
- methehack 13y agoHere's a times article on it from 8 months ago: http://www.nytimes.com/2012/09/03/business/media/reddit-thrives-after-advance-publications-let-it-sink-or-swim.html http://www.nytimes.com/2012/09/03/business/media/reddit-thri... The article is mostly about leaving reddit alone. IME, that's always the pitch to the acquired company though: "We love you and we'll leave you alone. We didn't buy you to break you." However, also IME, the acquirer can't help itself. It is what it is. You can see this, for example, in the article when Alexis Ohanian (one of the reddit founders) says "We ran into some annoying human resources bureaucracy when we tried to hire people, but we run lean and don’t make a lot of hires, so that didn’t come up a lot". But what if it had? Hiring practices and processes are a key way, IME, the acquirer completely undermines the acquired company as it can't let go of its hiring practices. In the article, they also say "Like many digital media companies, it [reddit] has a big audience and minuscule revenue." So its a long term play I guess at least financially.
- thoughtsimple 13y agoNext acquiring Apple worked pretty well.
- methehack 13y agoUnusually structured deal too :)
- methehack 13y agoI just thought of this one. Ebay << Paypal. I think this is an interesting one, and somehow extra satisfying, because its both a vertical integration and a complementary product.
- porter 13y agoadsense/adwords?
- methehack 13y agoAccording to this: http://en.wikipedia.org/wiki/AdSense#History http://en.wikipedia.org/wiki/AdSense#History ad sense was part of the Applied Semantics acquisition mentioned above. Adwords, according to this: http://en.wikipedia.org/wiki/AdWords http://en.wikipedia.org/wiki/AdWords was done internally once an acquisition attempt for a similar product failed.
- ig1 13y agoGoogle acquired Urchin (became Google Analytics), YouTube, Android and Applied Semantics (AdSense). Ebay acquired Paypal and Stubhub. Twitter acquired Summize (Twitter Search). Apple acquired PA Semi (designed the core chips used in modern iphone/ipads). Demanded Media acquired eHow (which is now vastly larger than it was in 2006) Amazon acquired Zappos. Microsoft acquired 86-DOS (which became MS-DOS/Windows) and Hotmail. Lenovo acquired IBM PC Group and in three years went from $3bn revenue to $15bn.
- meerita 13y agoMost of the examples are just the 3% of the companies acquired in the whole existence of the company. Google bought so many companies that most of them were just talent acquisition.
- rokhayakebe 13y agoYoutube. Android. Applied Semantics. That L.A. co that became Adsense or Adwords. Google Maps, I believe. Writely (Google Word). That Israeli co that became Google Sheets. Somewhat Blogger and many more just for Google.