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    Daniel#MD

    4 Significant Mergers in Technology History

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    There have been several noticeable acquisitions and mergers that have occurred within the tech industry over the past few years.

    This article takes a look back at some of the most significant mergers in technology history - both in terms of the shock and wow factor, and in the sense of the millions or billions of dollars there were involved in the negotiations.

    Facebook Buys WhatsApp for $19 Billion Dollars in 2014

    Following highly secretive talks conducted by Facebook founder Mark Zuckerberg and the CEOs of messaging application WhatsApp, it was announced back in 2014 that Facebook would buy out the messaging service (the biggest in the world) for a phenomenal $19 billion dollars.

    Facebook now completely dominates the tech messaging field - owning both WhatsApp and its own Facebook messenger which people are now using more and more frequently in place of traditional SMS or messaging services. After the acquisition WhatsApp founders Acton and Koum became billionaires and Koum now sits with Zuckerberg on the Facebook board of directors.

    Compaq Acquires Digital Entertainment Corp for $9.6 Billion Dollars

    Not all mergers and acquisitions are created equal and there have been more than a few incidents within the tech industry where the consequence of the effort was negative results such as a drop in share prices (as opposed to the expected and hoped for soars), laying off of staff, and high amounts of headaches and implementation problems.

    ‌One such as is the merger between Compaq computers and Digital Entertainment Corp back in 1998. Digital Entertainment Corp had been struggling with numerous problems, however it had also been creating computer servers since the 1960s and had built a good reputation and presence within the industry.

    Compaq bought out the business with the hopes of giving it's operation a refresh and utilising this excellent reputation to their advantage however things were not so simple.

    It was discovered that though DEC had once been wildly successful in the industry, and a market leader if you will, it was stagnating and its profits and successes were in decline.

    DEC had high costs of operation and very few desirable products within their portfolio (all were now outdated). Though the merger cost Compaq $9.6 billion dollars, the overall cost was far more significant since Compaq had to complete realign DECs priorities and strategic direction.

    A huge project management effort had to go underway to essentially redesign what the company offered.

    PMP certifications are an imperative part of project management efforts like this. Find information on PMP certification San Diego 4PMTI here. Compaq had to go into overtime with this business, in order to cut business costs and increase profits.

    Microsoft Acquires Skype for $8.5 Billion Dollars

    The year is 2011, and the announcement has just been made that Microsoft have purchased Skype for a whopping $8.5 billion dollars. This came as a surprise to... Well, pretty much everybody - from those within the tech industry to the general public. Just days prior to the deal being confirmed and publicly announced, rumours were circulating that potentially other companies would purchase Skype (Google and Facebook were considered as favourites to seal the deal)

    The shock purchase was the biggest one that Microsoft have made in their entire history of operation. In the year prior to the takeover, Skype's performance was struggling. The VOIP company had a revenue of $860 million dollars and an associated profit of $264 million dollars. However, with that being said, it had made an overall loss of $7 million dollars.

    Historically, prior to the deal, Microsoft has tended to stick to smaller scale acquisitions and taking over companies that were easier to manage and introduce to the standard "Microsoft" way of working.

    The oddity about the merger was the fact that Microsoft already provided its own services that were very similar to those offered by Skype. For example, windows live messenger had close to 400 million monthly users that were enjoying it's voice and video chat services - in a similar manner to the way that Skype operated.

    One advantage was presumably almost complete monopoly over the voice and video chat market - at least for a period before other players started entering the industry and now things like Facetime, WhatsApp video chat, and Facebook voice and video calls became a thing.

    Verisign Acquires Network Solutions for $21 Billion Dollars

    Back in the year 2000, Verisign - a global market leader in issuing web domain names and managing internet security bought ou Network Solutions Inc (A domain name registration company), in order to create the ultimate internet security powerhouse. The merger came at a time when people were becoming to be more aware about the risks and dangers that surround safety and the use of personal data online.

    The deal took the tech market by surprise and a consequence of the joint effort meant that the new company had over 12 million subscribers across the world. The valuation of the purchase of Network Solutions Inc was high, however Verisign were able to utilise their newly acquired subscriber list in order to sell the other products and services in the repertoire onto their new clients.

    Conclusion

    On occasion when these situations arise, the general public have no prior knowledge of the face that the two or more companies are even in discussion with each other. Sometimes the specific niches of the companies vary so significantly that it causes us to scratch our heads and wonder how on earth that collaborative effort could work. This just goes to show that anything is possible when it comes to technology.

    Edited by Daniel#MD


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