November 26, 2006 at 10:29 pm10 most unsuccessful acquisitions in the Internet sphere
- Transfer
The acquisitions market, which is so interesting for network companies, is now quite developed, so it's time to pay attention to unsuccessful acquisitions. Indeed, for every successful transaction there are at least a dozen failures.
Why can this or that purchase be called unsuccessful? Firstly, due to the high cost. So no one here will discuss deals within $ 50 million (it’s clear that for you and for me this is a considerable amount, but, for example, for Google it’s not).
Secondly, a project that does not fit into the long-term development strategy of the corporation may be an unsuccessful purchase.
So, I present to you a list of the 10 most unsuccessful takeovers on the Internet:
10. Hotmail- acquired by Microsoft in 1998, the cost is approximately $ 400 million. At the time of acquisition, the project was the second in the list of the most popular free email services. The purchase did not greatly improve Microsoft's position in building an online portal.
9. Skype - acquired by eBay in September 2005 for $ 2.6 billion. This project cannot be called unsuccessful - but eBay still has no idea what to do with it, even to at least return the money spent on the purchase. In addition, it is unclear how to integrate Skype into auctions - the main focus of eBay.
8. MySimon- Acquired by CNET in 1999 for $ 700 million. It was expected that the service, which helps to compare prices in various online stores, will give impetus to the development of new projects that are not exclusively related to the IT sphere. However, CNET did not have a clear idea of how to integrate MySimon into its structure, so the service is abandoned at the moment, moreover, more advanced platforms for price comparison have appeared.
7. BlueMountain.com - acquired by Excite Home in 1999. $ 780 million for an online postcard service. No comments.
6. Lycos- acquired by Terra Networks in 2000 for $ 4.6 billion. I have not heard anything else about Terra Networks. In May 2000, when the companies announced the deal, it was about $ 12.5 billion: such a sharp drop in prices by the time the deal was completed in October of that year was caused by a drop in the market value of both companies.
5. Netscape - acquired by AOL in 1998 for $ 4.2 billion. Honestly, it was a bargain: at that moment, Netscape lost its position “thanks to” Internet Explorer from Microsoft. However, AOL did not have a clear idea of what to do with Netscape, so at the moment you can forget about one of the leaders in the network market of that time.
4. GeoCities- acquired by Yahoo in 1999 for $ 3.56 billion. When was the last time you were at geocities.com? For example, I don’t remember. Shortly after the acquisition, the novelty of the service gradually came to naught. GeoCities could become MySpace - but the “social Internet revolution” bypassed it.
3. Excite - acquired by Home in January 1999 for $ 6.7 billion. Remember Excite.com? Remember that once it was the second or third most popular portal? A year and a half after the acquisition of Excite (incidentally, at $ 394 per user!), Home went bankrupt.
2. AOL- The company became part of TimeWarner in 2000. Everything is obvious here: this deal was doomed to failure from the very beginning. Shortly after the merger, AOL's business began to quickly lose ground, pulling TimeWarner along with it. The integration plan initially did not seem reasonable, so all the talk about "successful joint activities" has long ended.
1. Broadcast.com - acquired by Yahoo in 1999 for $ 5 billion. Each user of the purchased service cost Yahoo $ 710! All this happened, by the way, shortly before the famous “dot-com collapse”. Why is Broadcast.com in my ranking higher than AOL? One reason - Mark Cuban) Thanks to the profligacy of Yahoo, he was able to calmly go out of business, acquire the Dallas Mavericks basketball team and become one of the vivid examples of the realization of the "American dream" in life. Unforgettably.
Did I miss something?
Why can this or that purchase be called unsuccessful? Firstly, due to the high cost. So no one here will discuss deals within $ 50 million (it’s clear that for you and for me this is a considerable amount, but, for example, for Google it’s not).
Secondly, a project that does not fit into the long-term development strategy of the corporation may be an unsuccessful purchase.
So, I present to you a list of the 10 most unsuccessful takeovers on the Internet:
10. Hotmail- acquired by Microsoft in 1998, the cost is approximately $ 400 million. At the time of acquisition, the project was the second in the list of the most popular free email services. The purchase did not greatly improve Microsoft's position in building an online portal.
9. Skype - acquired by eBay in September 2005 for $ 2.6 billion. This project cannot be called unsuccessful - but eBay still has no idea what to do with it, even to at least return the money spent on the purchase. In addition, it is unclear how to integrate Skype into auctions - the main focus of eBay.
8. MySimon- Acquired by CNET in 1999 for $ 700 million. It was expected that the service, which helps to compare prices in various online stores, will give impetus to the development of new projects that are not exclusively related to the IT sphere. However, CNET did not have a clear idea of how to integrate MySimon into its structure, so the service is abandoned at the moment, moreover, more advanced platforms for price comparison have appeared.
7. BlueMountain.com - acquired by Excite Home in 1999. $ 780 million for an online postcard service. No comments.
6. Lycos- acquired by Terra Networks in 2000 for $ 4.6 billion. I have not heard anything else about Terra Networks. In May 2000, when the companies announced the deal, it was about $ 12.5 billion: such a sharp drop in prices by the time the deal was completed in October of that year was caused by a drop in the market value of both companies.
5. Netscape - acquired by AOL in 1998 for $ 4.2 billion. Honestly, it was a bargain: at that moment, Netscape lost its position “thanks to” Internet Explorer from Microsoft. However, AOL did not have a clear idea of what to do with Netscape, so at the moment you can forget about one of the leaders in the network market of that time.
4. GeoCities- acquired by Yahoo in 1999 for $ 3.56 billion. When was the last time you were at geocities.com? For example, I don’t remember. Shortly after the acquisition, the novelty of the service gradually came to naught. GeoCities could become MySpace - but the “social Internet revolution” bypassed it.
3. Excite - acquired by Home in January 1999 for $ 6.7 billion. Remember Excite.com? Remember that once it was the second or third most popular portal? A year and a half after the acquisition of Excite (incidentally, at $ 394 per user!), Home went bankrupt.
2. AOL- The company became part of TimeWarner in 2000. Everything is obvious here: this deal was doomed to failure from the very beginning. Shortly after the merger, AOL's business began to quickly lose ground, pulling TimeWarner along with it. The integration plan initially did not seem reasonable, so all the talk about "successful joint activities" has long ended.
1. Broadcast.com - acquired by Yahoo in 1999 for $ 5 billion. Each user of the purchased service cost Yahoo $ 710! All this happened, by the way, shortly before the famous “dot-com collapse”. Why is Broadcast.com in my ranking higher than AOL? One reason - Mark Cuban) Thanks to the profligacy of Yahoo, he was able to calmly go out of business, acquire the Dallas Mavericks basketball team and become one of the vivid examples of the realization of the "American dream" in life. Unforgettably.
Did I miss something?
About the author
James Nicholson is one of the founders of NetVentures, acquired by CNET in 1999. Subsequently, he held a managerial position at CNET. In 2001, "moved away from network affairs", traveled the world, opened an art gallery. Lives in New York. Currently working on a new network project.