There are numerous reasons why these kinds of deals happens
- To increase growth in future
- To acquire patents/technologies
- To shut down a rising competitor in the market.
Big fish must eat small fishes to survive. These deals usually involve astonishingly high price tags. Recently, Microsoft bought GitHub for $7.5 billion in stock. Yep, we all have heard about this deal, but do you have knowledge about other big buys. We are representing some of the biggest and most expensive deals in the tech industry till this date.
The buyout price ranges between $1 to $34 billion. It’s quite interesting that out of these 20, Microsoft is featured in 5 deals.
20. Facebook buys Instagram – $1 Billion
Facebook offered $1 billion for photo and video sharing app Instagram in April 2012. As of September 2013 Instagram has set up more than 150 million users. It was also listed among top 50 Android apps in 2013. After this deal Instagram grew up by 23 %, whereas Facebook only by 3%. As of 2017, Facebook had 2.1 billion users, while Instagram had over 800 million users worldwide.
19. Yahoo buys Tumblr – $1.1 Billion
Tumblr is microblogging and social networking site owned by yahoo since May 2013. This is the biggest deal ever done by Yahoo in history under the leadership of Marissa Mayer (former CEO of Yahoo). Since then Tumblr has shown no sign of dropping down. The service is more popular among teenage and college students. As of January 2018, Tumblr is 8th most popular social platform with more than $157 billion posts.
18. Ebay buys PayPal – $1.5 Billion
Ebay bought PayPal in exchange of $1.5 Billion in June 2002. It is an international e-commerce business which allows money transfer and payment through the internet. PayPal operates in more than 200 markets and manages more than 225 million accounts. As of 2017, Paypal’s total payment volume processed was over US $450 Billion, with annual payment revenue of $13 billion.
17. Google buys YouTube – $1.65 Billion
No need to give any introduction about Youtube.com. Internet search giant bought video sharing site in October 2006 from its founders, Steve Chen and Chad Hurley for $1.65 billion. Since then YouTube has gone through a lot of changes in terms of look, feel and performance. As of 2018, the site has 1.3 billion unique visitors per month, 300 hours of video being uploaded every minute, and over 5 billion videos being watched every day.
16. Dell Buys Quest Software – $2.36 Billion
Quest is software manufacturer and supports almost all kinds of infrastructural software. The company is best known for manufacturing TOAD, a product used by database developers. It offers many other products that help in creating, managing, monitoring software and application. On 2nd July, 2012 Dell announced that it was buying Quest for US $2.36 Billion.
15. Microsoft Buys Minecraft – 2.5 Billion
Microsoft has bought Mojang, the Swedish firm best known for developing a popular independent game Minecraft. The deal was announced on 15th September 2014. Minecraft is one the top selling apps on both Apple store and Google play. It has been also released for Xbox one and Playstation 4. It is expected that this deal will attract more users to Microsoft windows phone.
14. Google Buys Nest Labs- $3.2 Billion
Nest labs is a home automation company that creates wifi enabled, self-learning, smoke detector and advanced thermostats. The co-founder is none other than creator of iPod, Tony Fadell. The deal makes it obvious that Google is not only going to improve their search engine algorithm in future, but also they are ready to make your home system automated.
13. Verizon Buys Yahoo – $4.8 Billion
Verizon is buying the pitiful remains of what used to be the king of the Internet. Yahoo is probably the most mismanaged giant tech company ever. They had the opportunity to expand beyond the core of search business, and they screwed it all up.
The shareholders will keep the Yahoo’s lucrative investments in Chinese eCommerce giant Alibaba and Yahoo Japan. They will split into a separate, yet to be named, publicly traded company. The deal also excludes Yahoo’s cash and some patents.
12. Microsoft Buys Nokia – $7.2 Billion
Once upon a time when Nokia was the leader of Mobile market, but in recent years Android platform has destroyed their all customer trust and selling values. Microsoft has decided to give a tough competition in the mobile market by buying Nokia mobile unit for more than US $7 billion that includes mapping services, patent portfolio and 32,000 employees.
11. Oracle Buys Sun Microsystems – $7.4 Billion
Sun Microsystem sold Information technology service, Computer component and software and created a Java programming platform and Network File System (NFS). Oracle buys struggling Sun Microsystems and its Java programming language for $7.4 billion in April 2009. This deal kept Java away from IBM’s hands.
10. Microsoft Buys GitHub – $7.5 Billion
From left: Chris Wanstrath (GitHub CEO), Satya Nadella and Nat Friedman (VP Developer Services, Microsoft)
On June 4, 2018, Microsoft confirmed they will be acquiring GitHub – the biggest software development platform. They are paying $7.5 billion in stock in a deal that is expected to close later in 2018.
It’s not hard to figure out why Microsoft would want to buy GitHub. In 2017, they shut down their own Github competitor, Codeplex. Microsoft now has over a thousand developers actively pushing code to GitHub repositories. In fact, Microsoft is the top company with the most open source contributors on Github.
In coming years, Microsoft will use their partner channels, direct sales, global cloud infrastructure and services to accelerate enterprise developers’ use of Github.
9. Microsoft Buys Skype – $8.5 Billion
Skype is instant messaging client and a free voice IP service that was owned by eBay in 2005 for $3.1 billion. They sold it off to private investors at 40% loss. Microsoft bought Skype in May 2011 for US $8.5 billion. Since then Skype comes preinstalled on every Windows platform.
Till now Microsoft didn’t get any major profit, though this deal. But it’s much better than Microsoft’s acquisition of online advertising company, aQuantive in a 2007 for $6.3 billion. You can say that online advertising is still out of Microsoft’s clutches.
8. Hewlett-Packard buys Autonomy – $10.24 Billion
HP bought British Enterprise Software Company, Autonomy in August 2011. Later, in the end of 2012 they admitted that they had overpaid to buy Autonomy. After 1 year HP claimed that there was serious accounting scandal found in the company. The incharge Leo Apotheker and CEO Mike Lynch were fired when autonomy failed to reach target revenue.
7. Google buys Motorola Mobility – $12.5 Billion
Google bought the handset business Motorola for twelve and a half billion in August 2011 to challenge Apple in the Smartphone market and they failed to do that. In less than 3 years, Google sold Motorola to Lenovo (including 2000 patents) for US $2.91 billion.
6. Amazon Buys Whole Foods – $13.7 billion
Amazon made a big bet on physical stores and business of food when they bought organic grocery chain Whole Foods for $13.7 billion in cash. The deal was finalized in August 2017, valuing Whole Foods at $42 a share.
Also read: Famous Companies Started in Garage
Whole Foods stores will continue to operate under the same name, but as a separate unit of the Amazon. This deal shows Amazon’s growing interest in groceries. They already have their own delivery service, AmazonFresh, and continually testing a ‘click-and-collect’ model that lets users buy groceries online, with an option to pick them up in stores.
5. Walmart Buys Flipkart – $16 billion
On 9th May 2018, Walmart announced its acquisition of Flipkart (India’s largest eCommerce company) for $16 billion for a valuation of more than $20 billion. This is the largest eCommerce acquisition in the world, till date.
Walmart has acquired 77% stake in Flipkart, and now they will be competing against Amazon India, who is already ruling Indian market. In the meantime, Walmart will support Flipkart’s desire of going public, but did not put a date on it.
Flipkart cofounder Binny Bansal, Tiger Global, Tencent Holdings, and Microsoft will retain their stake, while Sachin Bansal (another cofounder) and Softbank will walk away with $1 billion and $4.7 billion, respectively. Moreover, the war between both giants will not only create a huge infrastructure of supply chain but also a large number of jobs.
4. Facebook Buys WhatsApp – $19 Billion
With a ridiculously high price Facebook bought more than just an app, in February 2014. Facebook was getting access to more than 450 million users. It was Whatsapp who killed all mobile messaging services. The idea is to develop simple, fast and non-bothering service for communication.
Brian Acton and Jan Koum came up with an app where user can share videos and images along with the texts. After acquisition, Chat app Telegram logs 5 million downloads in one day and Whatspp lost around 1 million of its current user, but in the meantime gained millions of new users also. Today, WhatsApp has more than 1.5 billion users.
3. Hewlett-Packard buys Compaq – $25 Billion
Founded in 1982, Compaq sold computer product and related services. It also produced few first IBM PC compatible computers and during the 90’s they became the largest supplier of PC system. HP welcomed Compaq into the family for $25 billion on 3rd September 2001 in a bid to compete with IBM. In 2013, HP discontinued the Compaq brand for lower-end systems.
2. Microsoft Buys LinkedIn – $26.2 billion
LinkedIn, a business oriented social network service has more than 400 million users. On June 13, 2016, Microsoft announced it will acquire LinkedIn for $26.2 billion. Jeff Weiner will remain the CEO of the company and he will report to Microsoft CEO Satya Nadella.
The software giant company Microsoft has made a significant push in the last couple of years to make its products more connects and wants to use data to make them more effective and intelligent. LinkedIn’s wide network offers data that could help. LinkedIn shares surged 47 percent after the announcement, while Microsoft’s stock gone down to 3.2 percent.
1. CenturyLink buys Level 3 Communications – $34 Billion
The third-largest telecommunications company in the US, CenturyLink, acquired Level 3 Communications, a multinational telecommunications and internet service provider company, for $34 billion in cash and stock. Level 3 entirely became a part of CenturyLink in November, 2017.
With this deal, CenturyLink is seeking to expand its reach in the business communication market and compete with Verizon and AT&T. The company will now connect over 350 metropolitan areas with more than 100,000 fiber-enabled, on-net building.
Now it will be able to provide a broader and more innovate product portfolio of advanced IT services and network solutions. And because of increased assets, it can continue to invest in broadband infrastructure for small businesses.