This has quietly been shaping up as the year when cash-rich
tech darlings dig deep into their pockets to snap up other
striking a deal
to pay nearly $1 billion for video-sharing website Twitch late
last month may be the most recent digital tech transaction, but
there have actually been plenty of even bigger hookups taking
place earlier this year.
have struck a couple of 10-figure deals for disruptive upstarts
earlier this year, and we still have another four months of
potential nuptials to consider.
Accepting Facebook's friend request
flirted with Snapchat
late last year, but Facebook didn't mope around when the
fast-growing photo messaging platform reportedly rejected $3
billion offer. It got back on its mergers and acquisitions horse
to negotiate the two biggest purchases in its brief corporate
WhatsApp came in February, turning heads for the $19 billion
price that Facebook was willing to pay for the lightly monetized
mobile instant messaging platform. A month later it shelled out
$2 billion for virtual reality upstart Oculus VR.
Spending $21 billion on a pair of deals in a span of weeks is
a pretty big deal. Facebook has made several purchases, but
outside of paying $1 billion for Instagram two years ago -- weeks
before going public -- it's been mostly small transactions for
More shopping sprees
It wasn't just Facebook cutting its biggest deal in history. When
Apple announced that it would be
taking in Beats
for $3 billion, it was the consumer tech giant's most valuable
acquisition. Another 10-figure deal closing this deal was
's $7.2 billion purchase of
's mobile handset business. Yes, the software giant announced its
bold push into smartphone hardware late last year, but regulators
didn't clear the deal until April of this year. This is
Microsoft's most expensive acquisition outside of its $8.5
billion deal for Skype.
has also cut some big checks in 2014. It actually kicked
things off in January with its $3.2 billion deal for learning
thermometer pioneer Nest Labs. It expanded its presence in smart
home gadgetry a few months later by picking up surveillance
equipment maker Dropcam.
Big deals make big sense
This brings us back to Amazon and its purchase of Twitch. It's a
smart move. The video game clip-sharing site attracted 55 million
unique visitors in July. This is a juicy market for Amazon on a
couple of different levels. For starters it brings a fast-growing
video-streaming property into its fold at a time when it's trying
to make a dent in streaming. Instead of paying for content as it
does with Instant Video and Prime Instant now it will have a site
where content creators want to contribute to the growing vault of
Another reason why this is a move that makes a lot of sense is
that Amazon will have closer ties to diehard gamers. If you're
one of the 55 million people hitting up Twitch you probably have
an interest in gaming, and Amazon is hoping to be a hotbed of
digital distribution when it comes to games.
All of this year's other big deals make sense. Apple may seem
to be overpaying for the premium headphone maker and digital
music service provider but it will be able to build on Beats
Music's online licenses as Beats headwear gets promoted to
Apple's growing customer base.
Google is clearly making the automated home a new tech
battlefront, and it's getting ahead of the pack with the purchase
of two growing players that are simplifying life around the home.
Microsoft's purchase of Nokia's mobile hardware unit opens up a
can of worms in terms of conflict of interest, but that didn't
stop Google from doing something somewhat similar with Motorola
earlier. If Microsoft wants more phones running Windows it needs
to make its own luck as it's doing with Nokia.
Facebook has a higher hurdle to clear in justifying its deals.
Paying $19 billion for a messaging app with a very light
monetization model may seem high. Shelling out $2 billion for a
geek toy maker that got its start on Kickstarter may seem more
like a hobby than a business pursuit. However, many investors
thought that Facebook was overpaying for Instagram. It seems to
have been money well spent now.
These tech giants are cutting big deals, but it's a better
place for their money to be than simply laying out on the balance
sheet. Expect more big deals to come.
Leaked: Apple's next smart device (warning, it may
Apple recently recruited a secret-development "dream team" to
guarantee its newest smart device was kept hidden from the
public for as long as possible. But the secret is out, and some
early viewers are claiming its everyday impact could trump the
the iPad. In fact, ABI Research predicts 485 million
of this type of device will be sold per year. But one small
company makes Apple's gadget possible. And its stock
price has nearly unlimited room to run for early in-the-know
investors. To be one of them, and see Apple's newest smart
Big Tech Keeps Writing Big Acquisition Checks
originally appeared on Fool.com.
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