Image via Complex Original
It seems like every year we witness a host of tech companies initiate million- and billion-dollar bids to snatch up their biggest competitors or the next major start-up. Predicting the aftermath of any corporate buyout is impossible. Some might have the potential to become success stories such as Apple’s acquisition of NeXT. Others are doomed to crash and burn like the AOL and Time Warner merger. Whatever the outcome, only a number of mergers and acquisitions have gone on to be remembered for changing to landscape of the tech industry. From the evolution of Microsoft to Facebook’s unprecedented mobile move, these are the 15 Most Important Tech Acquisitions of All Time.
Microsoft Acquires 86-DOS
Date: July 27, 1981
Acquired for: $75,000
In a last-minute effort to deliver IBM a 16-bit OS for its personal line of computers, Bill Gates and Paul Allen bought QDOS (AKA 86-DOS) from Seattle Computer Products for a meager $25,000. Soon after, the duo hired SCP programmer Tim Paterson and dropped an extra $50,000 for all rights to 86-DOS—opening the lane for Microsoft to license its own PC software, which would become Windows. The rest is history.
Apple Acquires NeXT
Date: Feb. 7, 1997
Acquired for: $404 Million
With the John Sculley era coming to an abysmal end, Apple was desperate to regain the services of the co-founder and CEO it forced out in mid-80s. So in order to persuade Steve Jobs back into the fold, the company purchased his computer start-up, NeXT. Jobs' return will forever be recognized as Apple’s biggest (and boldest) business move. But truth be told, it was the technology behind NeXT that also saved the company and laid the foundation for its future success, serving as stepping stone for the creation of Mac OS X. History was made.
Microsoft Acquires Hotmail
Date: Dec. 31, 1997
Acquired for: $400 Million
Pushing to compete against Yahoo, the Redmond, Wash.-based software corporation invested in Hotmail and saw its acquisition become the largest web-based email service for over a decade. The move brought about an increase in email subscribers and web traffic, plus the integration of Microsoft web apps such as Windows Live Messenger and SkyDrive presented a fresh and innovative user experience unlike any other service at the time (besides Google). Microsoft recently discontinued Hotmail in favor of its new email portal: Outlook.com.
AOL Acquires Time Warner
Date: Jan. 10, 2000
Acquired for: $162 Billion
The idea of merging one of the biggest digital content providers with the leading Web portal at the time seemed like the perfect marriage. Well, as we witnessed, the matrimony between AOL and Time Warner would turn out to become arguably the worst corporate takeover ever. Rumors of TimeWarner execs throwing shade toward its inheritor, along with AOL’s refusal to upgrade from its dial-up service were cited as primary reasons for the disastrous acquisition. Throw the dot-com bust into the equation and you have a tech marriage that was destined for massive failure. If there was one lesson to be learned here, it was how not to run a multi-billion-dollar company into the ground.
HP Acquires Compaq
Date: May 3, 2002
Acquired for: $25 Billion
Michael Dell called it “the dumbest deal of the decade.” And after a rough stretch that consisted of terrible management from one of the worst Tech CEOs of all time, Carly Fiona, a spying scandal, and several key Compaq execs quitting—we all shared the same sentiments. But through all the tribulations, HP still achieved its goal of becoming one of the tech industry's biggest players with the help of strong hardware sales and costly mistakes made by its competitors.
eBay Acquires PayPal
Date: Oct. 3, 2002
Acquired for: $1.5 Billion
After failing to achieve success with its own money transfer service, Billpoint, the ecommerce site decided to buyout the middle man in its operation, PayPal, which already accounted for 60 percent of business. The merger became eBay's smartest investment and a turning point for the tech industry. How so? On top of PayPal generating 40 percent of the business' earnings as of 2012, a new breed of Internet entrepreneurs known as the PayPal Mafia would emerge. You might know them as Reid Hoffman (LinkedIn), Elon Musk (Tesla, SpaceX), David Sacks (Yammer), and YouTube's Steve Chen.
Google Acquires Applied Semantics
Date: April 2003
Acquired for: $102 Million
Ever wondered how Google AdSense came about? Applied Semantics gets most of the credit for developing the fundamental algorithm that automatically targets ads based on Internet viewers and site content. Expansion would soon follow as Google placed its focus on acquiring banner ads specialist DoubleClick and the mobile advertising platform AdMob, which supports Android, iOS, webOs, Windows Phone and all standard mobile web browsers. In the end, the acquisition forever changed the online ad revenue game and remains the driving force behind Google’s multi-billion-dollar operation.
Google Acquires Android
Date: Aug. 17, 2005
Acquired for: $50 Million
Everyone’s heard the story of Google M&A chief David Lawee calling Android the company’s “best deal ever.” That’s up for debate. However, there’s no denying the merger's significant impact on the mobile industry. Since its official coming out party in October 2008 with the T-Mobile G1, Google's OS has gone on to capture more than half of the mobile market share (54 percent at the moment) and continues to grow on a global scale with over 1 million device activations per day. Though Google’s only banked $500 million since the platform’s launch, its ginormous user base, plus mobile search and advertising solutions should hopefully make it a more profitable acquisition in the next few years.
Lenovo Acquires IBM PC Group
Date: Dec. 8, 2005
Acquired for: $1.75 Billion
Many saw Lenovo’s bid for IBM's PC business as a dangerous gamble, especially since it was struggling to compete in the US market with its premium Think-branded computers. Looks like the joke was on naysayers, as the company managed to boost its revenue from $3 billion to $15 billion in just three years, while playing trendsetter with its updated line of high-end and sturdy notebooks. Seeing how Lenovo recently dethroned HP as the top global PC manufacturer, it's safe to say the merger was a success.
Disney Acquires Pixar
Date: Jan. 23, 2006
Acquired for: $7.4 Billion
Shortly after being ousted as CEO of Apple in 1985, Steve Jobs negotiated the purchase of George Lucas' digital animation studio. Renamed Pixar, the studio behind numerous digital blockbusters became Disney’s most valued asset heading into 2000. It all began with Toy Story in 1995 and Pixar’s managed to churn out several billion-dollar films for the mass media corporation ever since. Let's not forget the vast fortune made off of the films merchandising sales as well. The acquisition transformed Disney into an unstoppable marketing machine and one of the biggest major film studios in Hollywood.
AMD Acquires ATI Technologies
Date: July 24, 2006
Acquired for: $4.3 Billion
As Intel continued its dominance on the processing front, AMD made the call to purchase graphics specialist ATI. The merger was considered a huge bust at first with the company bleeding through most of its finances. Then the concept of using graphics processors to enhance CPU performance caught the attention of numerous hardware manufacturers. AMD would go on to fill that void with the development of its new Fusion processors, which featured ATI technologies and integrated graphics and general processing power into one chip. Business boomed and next thing you know, AMD became one of the industry leaders in GPU technology.
Google Acquires Youtube
Date: Oct. 9, 2006
Acquired for: $1.65 Billion
In purchasing the video-sharing website, Google basically scooped up its biggest search engine threat. The merger provided YouTube with a number of moneymaking solutions that Google has managed to exploit through advertisements and contract negotiations with content owners. Since the takeover, the service has become one of the most profitable businesses ever, generating over $1 billion in annual revenue.
Sirius Acquires XM Radio
Date: July 29, 2008
Acquired for: $3.3 Billion
Back in 1997, the FCC granted licenses for both satellite radio properties under the stipulation that neither attempted to acquire each other. Obviously that didn’t stick. The FCC made the merger official after concluding its one-year investigation. Since then, Sirius has broken free from its financial deficits and has seen growth in revenue over the past four years.
Oracle Acquires Sun Microsystems
Date: Jan. 27, 2010
Acquired for: $7.4 Billion
Oracle CEO Larry Ellison is revered as the tech industry's most ruthless businessman. The world’s sixth richest man saw the opportunity to buyout his biggest competitor and spared no expense in doing so. Seven billion was enough to bring Sun Microsystem's over to the dark side. Need we remind you this all transpired during the Recession? In acquiring all of Sun's software and hardware product lines, Oracle has solidified its position as a powerhouse in both tech sectors.
Facebook Acquires Instagram
Date: April 12, 2012
Acquired for: $1 Billion
Facebook spent months working on a solution to heighten its mobile presence. The acquisition of Instagram, the hottest new mobile app, seemed like the best answer. With over 100 million registered users, the photo-sharing app is primed to strengthen the social network's ecosytem, as well as tighten its integration between digital, mobile, and social platforms.
