1. April 2012: Facebook purchases Instagram for $1 billion
Acquisition of Instagram by Facebook five years ago was not surprising – for some time before Facebook had been working on a standalone photo app. Although the price was widely derided because of low revenue of Instagram, the deal has paid off. Now Instagram has 700 million users (while it has only 30 million before the deal). The launch of Stories in Instagram – actually a Snapchat clone, was successful enough to stop Snapchat’s user growth. Reportedly, Snap CEO Evan Spiegel declined a $3 billion offer from Facebook in 2013.
he deal concluded in 2000 between AOL and Time Warner Inc is considered the worst merger not only in the history of tech but also across the entire business world. $165 billion deal described as the “largest merger in American business history”. Two media giants were driven by the idea that the combined business would benefit from cooperation in technological infrastructure. The merger was proposed to give Time Warner the ability to digitise its content and grip a new online audience, AOL in return wanted access to Time Warner’s cable systems, and additional content to provide to its 27 million subscribers (40% of total US online subscribers). However in two years the merger resulted in a net loss of $99 billion, Time Warner Chief Jeff Bawkes described it as “the Biggest Mistake in Corporate History”, which ended with the separation of the two companies in 2009 substantially poorer than before the merger, and in 2015 Verizon bought AOL for $4.40 billion.
As usual in the end of each month we post a list of the most noticeable technology company acquisitions.
The first day of March was rich in M&As. The first name of the company is those who acquired and the second one is who was acquired correspondingly. Let’s start with e-Zest Solutions.
An e-commerce marketplace Souq.com headquartered in Dubai, which was already commonly described as “the Amazon of the Middle East” has been recently acquired by Amazon. The retailer employs more than 3,000 people and sells over 400,000 products, from clothes and perfumes to notebooks and televisions to neighboring Middle Eastern countries such as Kuwait, Oman, Bahrain and Egypt. The well-established player has over 23 million online visits per month.
Fitbit Inc., the fitness band maker, has recently acquired software assets and intellectual property from California based Pebble Technology Corp. First launched in 2012 on Kickstarter and gained fame for being a wildly successful crowdfunded project, Pebble produced utilitarian smartwatches, with their “e-paper” displays and relatively long battery life. They say the deal makes obvious that Fitbit is going to totally immerse into the smartwatch market, extend its leadership position in the wearables category and compete with Apple smartwatches.