The acquisition strategies of the digital giants

The world’s premier technology majors have all followed contrasting styles when acquiring companies, a strategy usually dictated by the segment they operate in and the overall vision mapped out by their respective CEOs. The overall trend is that they spend big, and are not afraid to take a gamble. Certainly, being able to attract the likes of Google and Apple to a start-up is a major breakthrough for any sell business, although these big-hitters typically go for already fairly established firms. Indeed, our personal expertise lies in finding acquirers that are perhaps not so obvious and simple to locate, partly why clients value our commitment to excellence, delivery focus and ability to build strong and successful relationships.

Google has demonstrated the widest range of demand

Perhaps unsurprisingly considering the diverse portfolio of Google’s business interests, the US major has demonstrated the widest scope in terms of segments when acquiring companies. Clearly, the firm believes the future is connected to data gathering, machine learning and automation, but its acquisitions have been sporadic and aggressive across all levels of technology. In the past four years the company has averaged around 50 acquisitions a year, but its recent purchases have focused on consumer-facing appliances. Google’s biggest acquisitions include YouTube, Motorola Mobility, Nest Labs and DoubleClick, ranging from digital media to smart home appliances.

Apple focuses on low-cost, innovative start-ups

Apple’s acquisition strategy has been largely guided by its infamous founder Steve Jobs. The company has kept outside of bidding wars between the majors and has avoided big-ticket purchases. Instead, much like Jobs throughout his career, Apple has concentrated on acquisitions that can enhance its existing line of products rather than enter new and uncharted segments. Apple buys for the logic of technology rather than market share. In fact, Jobs saw acquisitions as a failure to innovate within, which has kept acquisition numbers low, although his successor Tim Cook has been more proactive in the market.  Anobit at $390 million and AuthenTec at $356 million represent the largest purchases to date.

Facebook looks beyond its brand

Unlike other tech majors, Facebook is using its capital reserves to rapidly expand outside of its primary expertise, perhaps believing the days of its social networking dominance are numbered. The acquisitions of WhatsApp and Oculus have been impressive by their sheer expensiveness, but also by the long-term vision of the firm. It is largely believed that Facebook has increased its acquisitions pace to combat growing brain-drain and add valuable human capital. The company has certainly led the headlines in 2014 so far.

Yahoo reinvents itself

Yahoo was certainly a company in dire need of fresh blood, and the acquisitions green light was enabled by CEO Marissa Mayer, who oversaw a strong pro-acquisition stance following years of inactivity in 2011 and 2012. Now the company appears to be placing a bet on online entertainment, primarily in the form of broadcasting, as well as maintaining a presence in social media. Its largest acquisitions have included Overture, Broadbcast.com and Tumblr, all in the billions of dollars.

Amazon has stuck to what it knows best

The world’s marketplace giant has avoided confrontations in segments where it has not traditionally held a presence. Indeed, Amazon has focused on its niche segment in acquisitions – e-commerce. The vast majority of the company’s purchases have focused on e-commerce sites or tools, as well as hardware that can expand the core retailing business. Biggest acquisitions include e-commerce platform Zappos and delivery technology firm Kiva Systems. It will certainly be interesting to see if Amazon braves entry into other segments through acquisitions or if the company continues to focus on its core product.

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