2011 was a year of kinetic motion in the technology industry. IPOs were launched. Startups received huge funding. In a rebounding economy, the tech sector is a key indicator of both progress and overall sentiment.
It was a huge year for mergers and acquisitions as well. Some were made out of convenience. Others were contrived to balance strength and weakness. Regardless of the reasons, 2011 saw some major companies making huge moves to consolidate the industry just as startups sought to expand it.
The end results in many cases were beautiful. There were many 10-digit (and a couple of 11-digit) deals in 2011 that made headlines, but we’re going to look at importance and ramifications rather than sheer size. Here are the 10 most important acquisitions of the year:
10. RIM Buys Gist
In a year that truly started the demise of RIM as a serious player in the mobile industry, there was one shining beacon of good decision making that they can point to even if they do fail by the end of 2013. When they purchased content management software company Gist for an undisclosed amount, RIM was trying to increase their lead over iOS and Android in the one area where they still had a lead – email/calendar management.
It may not be enough to save the company, but it’s helping them to keep their core corporate market intact as long as possible.
Oracle sees their future (and everyone else’s) in the cloud. Their $1.5 billion acquisition of cloud-based customer service provider RightNow bolstered their enterprise product offering and enhanced its public cloud solution.
With nearly 2000 organisations using RightNow at the time of purchase, it also opened the doors to increasing their overall service penetration in this competitive industry.
If there’s one theme that Twitter management stuck to in 2011, it’s that they are focused on being a player in marketing and corporate communications. They want businesses to start using Twitter as a way to improve their branding, to reach out to current and future customers, and to have the “humanized” component visible to the general public. Many weren’t sure how the acquisition of Tweetdeck fit into that equation until CEO made a statement that cleared it all up for us:
“This acquisition is an important step forward for us. TweetDeck provides brands, publishers, marketers and others with a powerful platform to track all the real-time conversations they care about. In order to support this important constituency, we will continue to invest in the TweetDeck that users know and love.”
Data is a valuable thing. Being able to crunch that data and turn it into something actionable is priceless. Crunching is what Hunch does best, which is why eBay bought them for $80 million. It was a quick “build and turn” for New York angel investor Chris Dixon who turned down a quick $60 million offer from Google shortly after raising $20 million in funding.
Compared to some of the other deals, this one is tiny. Still, it will affect what millions of people see when they visit eBay (and as a result can affect what they buy as well).
For eBay, it gives them an extremely talented team that will grow from 50 to 200 in time that will be able to integrate their data crunching into eBay’s eCommerce recommendation model, an element that has been average at best compared to others in the industry.
As consumers spend more time, give more personal information, and discuss more of their purchases through social media sites, social analytics and management companies like Radian6 are there to help decipher it all for companies. That’s what Salesforce saw in them and they were willing to shell out $326 million in cash and stocks to get it.
Salesforce, a leader in the lucrative customer relationship management (CRM) arena, has been a leader at integrating email and other online forms of communication with the traditional phone call and snail mail form of communication with customers but decided against building their own version to go after social signals. They invested in Seesmic’s pivot towards the same goal, then purchased Radian6 shortly after. Consider the bets hedged.
Some acquisitions in 2011 were bound to happen. Others came as complete surprises but made sense once the transactions were complete. We’re still waiting to see exactly what SAP saw in SuccessFactor, an employee management software as a service (SaaS) provider. The company was losing money and the $3.4 billion price tag was 50% higher than it’s closing stock value the previous Friday.
Still, one doesn’t become the third-largest pure software company in the world without making good decisions, so expect this acquisition to prove its worth in 2012.
Data, as we said before, is valuable. Enterprise information management is even more valuable, at least in HP’s eyes, as they purchased Autonomy for $10.2 billion. The wide array of solutions that Autonomy provides touch 25,000 customer accounts worldwide. According to HP, these services are “complementary across HP’s enterprise offerings and strengthens the company’s data analytics, cloud, industry and workflow management capabilities.’
2012 will prove to be a pivotal year for the hardware and software giant. We will see how Autonomy fits into the mix.
Facebook, Twitter, and Google+ may have received all of the attention in the social networking world in 2011, but quiet giant Tagged.com tripled its registered users to over 300 million worldwide when it purchased hi5. Both companies pivoted when it became clear that Facebook was going to win the battle over friends and family to become “social discovery” sites where users meet new people.
“The way you compete with Facebook is you become the leader in some other space,” said Tagged CEO Greg Tseng. “The downfall of MySpace (and others) was they kept trying to compete head on with Facebook and then pivoted too late. One strategy is for us to grow and dominate and take other social sites and pivot them.”
As social discovery gets more interested parties and more feet on the ground, it should prove to be the fastest-growing segment of social media in 2012.
Microsoft may have (luckily) failed to acquire Yahoo!, but their biggest acquisition ever wasn’t anything to sneeze at, either. For $8.5 billion, Skype represents and stronghold in online communication that is threatened by Google, Apple, and Facebook (as well as hundreds of others competing in the field).
It can help them in many areas; Office and its Exchange program need to add Skype functionality and future iterations of the Windows Phone can gain market share through seamless integration with Skype. If they accomplish both, the price tag will be worth it. If they fail, it may turn out to be the biggest loser amongst major acquisitions in 2011.
The biggest acquisition on the list was also the most important. The ramifications of Google’s purchase of the mobile handset maker for $12.5 billion will be felt for years to come as it sets the stage for even more direct Apple vs. Google battles.
It also opens some doors for Microsoft who can use this to get competitors of Motorola to look more closely at Windows Phone rather than putting all of their eggs in the Android basket.
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What will 2012 hold? Will Facebook make a major purchase (possibly even buying Bing from Microsoft to get into the search arena)? Who will buy Yahoo!? Is RIM on the market yet?