Sep24

Big Business: Billion Dollar Acquisitions

Posted by Kelly Kirkham

Tales of the largest technological business acquisitions that amount to billions….

Every startup dreams of becoming a unicorn business, but what happens after that? As Skype and What’sApp know very well, if you become a promising startup company eventually a bigger fish will come and snap you up.

Every day new stories emerge of big fish being bought out by even bigger fish. Big businesses are always on the look out for the next blossoming technology that can help them evolve into a bigger and better company; in the age of Digital Darwinism ‘innovate or die’ has become the philosophy of global companies big and small.

We’ve been taking a look at some of the biggest and most lucrative acquisitions of all time, and have outlined the top five below. Read carefully; there could be some business tips in there!

#5.  Veritas

$13.5 Billion

The international software company was purchased by Symantec Corporation in 2005 for the sum of $13.5 billion, becoming the fourth-largest software company in the world and turning over about $4 billion in revenue. Ten years later, Symantec Corporation is now selling Veritas to The Carlyle Group, a global investment firm, for the modest price of $8 billion.

Veritas was founded in 1983 by Mark Leslie, a Stanford professor and entrepreneur. The original company was called Tolerant Systems and provided data backup and recovery. After merging with Symantec, Veritas widened their services including their most profitable service: NetBackup storage appliance.   

#4. Electronic Data Systems Corp.

$13.9 Billion

Founded by Ross Perot in 1962, Electronic Data Systems was purchased by Hewlett Packard in 2008 for $13.9 billion. Prior to the acquisition, Electronic Data Systems was an American Multinational information technology equipment and services company out of Plano, Texas, providing many services and technologies for Medicaid and Medicare, ATMs, and airline and automobile payment and travel systems.

In 2008, the company employed 139,000 people across 64 countries and was ranked as one of the largest service companies on the Fortune 500 list. Following the merger several round of layoffs transformed the company structurally. Electronic Data Systems became known as HP Enterprise Services in 2009, the name they still operate under today.    

#3. Compaq

$24.2 Billion

Hewlett Packard again make the list with their acquisition of Compaq in 2001. Compaq Computer Corporation, makers of the first IBM PC compatible computers as well as the first to legally reverse engineer the IBM Personal Computer, was created in 1982. The company then became the largest supplier of PCs in the 1990s.

Hewlett Packard caught word of the booming success and took over the Compaq workforce of 145,000. They continued under the Compaq brand name until 2013 when it was discontinued within the United States. Compaq Presario computers can still be purchased outside of the US, but the brand is now owned by an Argentinian company, Grupo Newman.    

#2. WhatsApp

$19 Billion

In 2014, a deal was completed in Facebook creator Mark Zuckerberg’s house for the acquisition of WhatsApp. The small Ukrainian startup brought in an estimated $20 million in 2014 by charging $1 for a yearly subscription for their messaging service.

Founders Jan Koum and Brian Acton instantly became every small startup company’s idols when they celebrated their overnight billionaire statuses. Jan Koum is now a member on the Facebook board and can most likely look forward to continued success as well as the prized $1 salary of billionaire-dom.    

#1. AOL

$106 Billion

Yes, you read correctly: AOL was acquired by Time Warner for $106 Billion dollars. In hindsight this might not have been the best decision for the company, as AOL fell victim to Digital Darwinism soon after. In fact it is now seen as a warning story for other businesses buying hot tech startup companies.

America Online (AOL) was synonymous with the early internet. The company really was the team to beat in the technological industry, but the company failed to keep up with the rapidly advancing business climate and was quickly surpassed, their dial-up connections becoming archaic. However, they did create a booming content empire, including The Huffington post and TechCrunch.   

But the story does not end there. In June 2015 Verizon purchased AOL for $4.4 billion in 2015, a much more conservative price that originally purchased. Verizon is currently #15 on the Fortune 500 and represents one of the most successful companies in the world. Verizon hopes that AOL can help them better reach customers through their creative marketing and advertising technologies.    

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