The Dumbest Acquisitions In The History Of Tech

cisco flip

Photo: AP

With Google deciding to pay $12.5 billion to buy Motorola, we decided to take a look at some of the worst acquisitions in the history of the tech industry.The acquisitions in this list were either giant wastes of money, or giant wastes of potential.

We think the Google-Motorola acquisition will one day join this list. Motorola is just too big a company with too many legacy issues for Google to solve.

It’s going to be a massive headache that’s eventually shut down or spun out, just like these acquisitions …

11. Yahoo pays $4 billion for Geocities

During the tech bubble Yahoo splurged for Geocities. It didn't do much with the site, and ultimately killed it 10 years later.

10. HP paid $1.2 billion for Palm, and it's unclear what it's getting

It's still early, so arguably this one doesn't belong on the list, but HP's decision to buy Palm for $1.2 billion is not working out. We just learned Palm's first iPad challenger sold in such limited quantities that Best Buy wants to send them back to Palm. The Palm platform is so tiny that it's often not even mentioned in the smartphone marketshare wars.

9. AT&T paid $100 billion to enter the cable business

AT&T thought it would be a good idea to diversify by paying $100 billion to take on cable company TCI. It was wrong! AT&T broke itself up a few years later and sold off the cable assets.

8. eBay tried to grow its business with a $2.6 billion purchase of Skype

For a long time, eBay's purchase of Skype was on everyone's list of terrible acquisitions. To be sure, it didn't work for either company. But, Microsoft has now paid $8 billion for Skype, which eBay retained a 30% in, so it's not a total disaster.

There's no debating that it was a big mistake. It was a drag on eBay, and it limited Skype. But, it's just not as big a mistake as it once was thanks to Microsoft buying Skype.

7. Microsoft botched the Danger acquisition

Microsoft paid an estimated $500 million for mobile phone company Danger. It was supposed to be working on new phones for Microsoft, but most of the key employees left the company. The end result of the acquisition was the Kin, a social smartphone from Microsoft that totally bombed.

6. Cisco paid $590 million for Pure Digital, then shut it down two years later

Cisco probably bought Pure Digital, the company that makes the Flip, right at the peak of its value in 2009. Since then high definition video cameras have been built into just about every smartphone making the Flip pretty much worthless in the long run. Which is probably why Cisco killed the $590 million acquisition earlier this year.

5. Microsoft burned $6 billion on aQuantive

After Google bought DoubleClick, Microsoft tried to keep up by buying ad company aQuantive for $6 billion. The acquisition never really worked out. The aQuantive executives left two years after the deal closed and the technology was discarded.

4. Yahoo made Mark Cuban a billionaire when it paid $5 billion for Broadcast.com

This one comes from an old list by StockTwits cofounder Howard Lindzon. He jokes this acquisition is worse than AOL-Time Warner because it gave Mark Cuban the money to buy the Mavericks, and from there the spotlight to become a part of the national landscape. Putting that aside, it was a pretty silly buy during the dot com boom times.

3. AT&T paid $7 billion in a hostile effort to get into the PC business

In 1991, AT&T tried to elbow its way into the personal computer business with a hostile $7 billion takeover of NCR. It didn't work, and AT&T later spun the company back out at a $4 billion valuation.

2. Lycos went from a $12.5 billion company to a $95 million company in four years

Terra Networks acquired Lycos in an all stock deal that valued Lycos at $12.5 billion at the peak of the bubble in 2000. Just four years later it sold Lycos for $95 million.

1. AOL-Time Warner is obviously the worst

What more can you say about this deal? It destroyed billions in shareholder value and crippled both companies for years.

BONUS: The greatest acquisition of all time?

Apple spent $429 million to buy Steve Jobs and his software company, NeXT. That's clearly paid off. Apple has climbed to become the most valuable company in the world. It's currently neck and neck with Exxon.

BONUS: The second greatest acquisition of all time?

Google paid just $50 million or so to buy Android, which is now the world's biggest smartphone platform. A pretty darn good deal.

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