In January, in our article “Bolting on” to remain an important part of social media growth in 2014, we analysed a growing trend for social media giants to pursue bolt on acquisitions, as they drive to become more and more integrated with people’s everyday lives. Below, we examine some further acquisitions “on trend” with that prediction both in the social media spectrum, and also across the technology sector generally.
We set out below a choice pick of mergers and acquisitions from 2014 so far:
1. Facebook acquired LiveRail for an estimated $400 - $500 million
LiveRail is an online video advertising company which helps online publishers and advertisers directly target 7 billion video adverts to millions of internet users. This acquisition should see Facebook’s ad revenue soaring with the combined power of LiveRail’s targeting technology and Facebook’s collection of user data. From an outside perspective, the clear synergy with Facebook’s advertising and revenue model is hard to miss.
2. Facebook acquired Oculus Rift for approximately $2 billion
Oculus Rift is creator of the forthcoming Oculus Rift virtual reality headset. Announcing the acquisition Facebook founder and CEO, Mark Zuckerberg said “Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate.” This is an interesting acquisition for Facebook, showing a diversified acquisition strategy which includes hardware in contrast to the LiveRail acquisition.
3. Dropbox acquired MobileSpan for an undisclosed sum
MobileSpan allows employees to use their own devices to log on to their employer's network securely. It is expected that MobileSpan's technology will be integrated into its Dropbox For Business division. Many businesses have been sceptical of Dropbox’s security credentials, so an acquisition so clearly focused on security may help open up this market segment for Dropbox.
4. Apple acquired Beats Electronics for approximately $3 billion
Apple has historically received some criticism in the media for the quality of headphones which it bundles with its devices. The acquisition of Beats Electronics (which produces headphones and speakers and offers a music streaming service) looks set to change that. In its announcement of the deal Apple said "Music has always held a special place in our hearts, and we're thrilled to join forces with a group of people who love it as much as we do. Beats co-founders Jimmy Iovine and Dr Dre have created beautiful products that have helped millions of people deepen their connection to music."
5. Google agreed to acquire Nest Labs for $3.2 billion
In January, it was announced that Google would acquire the home automation business Nest Labs. A clear diversification for Google, this acquisition was of a market leading “smart thermostat” and “smart smoke alarm” designer and manufacturer. Perhaps a “Google Home” is not confined to the realms of science fiction.
In a race to become key players in the “internet of things”, our sector continues to diversify through acquisition. Existing big technology names, and particularly social networks, look set to continue bolting on for the foreseeable future, and are prepared to pay big money for the right opportunity.
From our experience it is clear that a strategic acquisition can massively enhance a company’s profile and revenue and can be critical to ensure your business stays ahead.