Eight Acquisitions That Didn’t Happen but Could Have Changed History

Yahoo missed out on buying Google for only USD 1 million, as well as Facebook at a later stage

Eight Acquisitions That Didn’t Happen but Could Have Changed History

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956 ~ 5 мин. четене
Автор: Aleksandar Aleksandrov

Big acquisitions are an integral part of the rise of the digital industry. Its main players have been competing for a long time to buy promising startups in their attempt to position themselves in more and more market segments. Facebook has gradually acquired Instagram, WhatsApp, Oculus and other projects. Microsoft added to its assets Skype, LinkedIn, Minecraft and GitHub in a series of deals worth billions of dollars. Google has acquired YouTube, Waze, DoubleClick and many more over the years.

These key acquisitions have surely changed the history of technology, and to a great extent – our lives. Just as interesting, however, are the many deals involving some of the more prominent players that did not happen. If successful, some of them could have led to even greater changes and could have predefined the way we use the Internet. Today, many might be worried about the bilateral hegemony of Google and Facebook in many technological (and not only) industries. However, these giants may not have existed or may have been on the brink of turning into part of other companies and platforms, and may have even fallen into oblivion. Let’s see how.

The Big Blunder of Yahoo

Back in the distant 1998, two young men offered to the already popular online giant Yahoo to sell their technological startup together with a good (according to their words) Internet search engine technology developed by them. This was a system based on the so-called PageRank and for which the two men wanted USD 1 million. Yahoo declined their offer with the explanation that the technology contradicts their main goal – consumers spending more time on their platform. And they surely made the biggest mistake in the history of the company because the two young men were called Larry Page and Sergey Brin, and the search engine they wanted to sell to Yahoo later became known as Google. Years later, Yahoo offered USD 3 billion to its competitor but received a counter-proposal of USD 5 billion and refused again.

Today, Google is one of the most expensive companies in the world, an absolute hegemon in the Internet search engine services and a key player in online advertising and in a number of other industries. Yahoo on the other hand was bought by Verizon three years ago for only USD 4.6 billion. It is difficult to predict what would have happened if Google was included in the assets of Yahoo, but surely the lack of such a strong competitor would have given Yahoo the leadership position and much better opportunities for development.

Yahoo Missed out on Facebook, too

Not only did it sleep through the rise of its main competitor but the company established by Jerry Yang and David Filo missed adding to its assets another hegemon in today’s online space – Facebook. The truth is that in 2006, the search engine showed interest in Mark Zuckerberg’s company that was still young at the time and even offered it USD 1 billion. Some claim that Zuckerberg almost agreed to sell the social network, but suddenly, the then CEO of Yahoo, Terry Semel, reduced the price to USD 850 million. This made Facebook’s founder waiver and ultimately the deal did not take place. Later, Yahoo bought Tumblr and some other social platforms, but they are far from the success of the company established in Harvard. Today, Facebook costs over USD 500 billion and the company itself buys out successfully its younger competitors.

Yahoo in Turn Became an Acquisition Target

Perhaps the biggest deal that failed in the IT industry was undoubtedly Microsoft’s attempt to acquire Yahoo for the impressive USD 45 billion. The year was 2008, and the search engine had already lost its greatness, the competition from Google, Facebook and Amazon was quite noticeable, giving it the role of a secondary player in the new digital economy. However, the then Director of Microsoft, Steve Ballmer, was firmly convinced that they should acquire Yahoo. Its co-founder, Jerry Young, who at that time was its CEO, however, decided that the amount of USD 45 billion significantly underestimated the company and rejected the offer. Only to sell it eight years later for ten times less money.

How Microsoft Did Not Become a Leader in Design Software...

In 2010, some US media, The New York Times being among them, spread the news that Steve Ballmer was negotiating for the possible acquisition of the giant in visual software solutions – Adobe. Although both parties did not officially confirm the information, a number of publications assumed it was possible for such a deal to be announced soon. This, however, did not happen, and ultimately, Microsoft did not manage to take over this prospective market, as well as to strengthen its position in the cloud services, a segment in which Abode is already developing successfully.

... Not Even with Media-on-Demand Platforms

Two years later, the media pointed out another prospective company as a Microsoft’s goal for acquisition. This time it was the Netflix movie platform. The information was again not confirmed and again both parties failed to reach an agreement on the deal. However, Cnet reporters said they had seen an email from a US bank saying that Microsoft offered USD 90 per share of the entertainment site.

Everyone Loves Netflix

Let’s go back again to the early years of the dot com boom, and more precisely, to 1998, when another technological giant tried to make a deal for Netflix. This was Amazon, which offered USD 15 million to the owners of the platform – Reed Hastings and Marc Randolph.  And although Randolph wanted to sell, Hastings declined with the argument that the amount was too small. The truth is that at that time Netflix was not profitable at all and it was not very clear how this could change.

Google Is Reaching Out to Group Shopping

The rise of the group shopping in the last ten years has been associated primarily with the US startup Groupon, which has been a total hegemon in this promising sector for a long time. Willing to enter the sector, in 2010 Google offered USD 6 billion for the acquisition of the company, but was rejected. Groupon might not have serious technological assets but is extremely valuable as a sales channel. If the deal was completed, it would have been the first more significant entry of the search engine in the online sales segment, which would substantially diversify its revenue sources that include mainly advertising services.

Facebook having Appetite for Snapchat

Mark Zuckerberg is known for doing everything he can to acquire the main competitors of his social network. One by one, Instagram, WhatsApp and other smaller companies were acquired. However, this did not happen with Snapchat. In 2012, Facebook offered USD 3 billion for the promising new platform, but was firmly rejected. As a result, Snapchat continues to be a thorn in the flesh of the giant, and after its successful debut on the stock exchange this summer, the Snap company, which owns the platform, reached a capitalization of over USD 20 billion.

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