Slashdot Mirror

← Back to Stories (view on slashdot.org)

WhatsApp: 2nd Biggest Tech Acquisition of All Time

Posted by timothy on from the of-all-time! dept.

Nerval's Lobster writes "Facebook CEO Mark Zuckerberg decided to drop a cool $16 billion on WhatsApp, a messaging service with 450 million users. It was a mind-boggling sum, even if you buy into Facebook's argument that WhatsApp (which will continue to operate as an independent subsidiary, at least for the moment) will soon connect a billion people around the world. But it wasn't the biggest tech acquisition of all time: that honor belongs to Hewlett-Packard, which bought Compaq for (an inflation-adjusted) $33.4 billion in 2001. Facebook's purchase of WhatsApp comes in second on the list, followed by Hewlett-Packard's purchase of Electronic Data Systems for $15.4 billion; Google's acquisition of Motorola Mobility for $13 billion, and Oracle snatching up Peoplesoft for $12.7 billion. In sixth comes Hewlett-Packard again, with its Autonomy buy in 2011 (for $11.7 billion), followed by Oracle's BEA Systems acquisition ($9.4 billion) and Microsoft seizing Skype ($9.0 billion). What do many of these highest-cost purchases have in common? Many of them didn't pan out. Hewlett-Packard's Compaq, Autonomy, and EDS acquisitions, for example, made all the sense in the world on paper, the tech giant eventually took significant write-downs on all three (Autonomy in particular was an outright disaster, resulting in a $8.8 billion write-off and widespread allegations of financial and management impropriety)." Update: 02/20 19:32 GMT by T : Of interest: Mother Jones has an interesting take on the seeming mismatch between Facebook's business model and the way the WhatsApp founders think about advertising. Hint: they hate it.

5 of 257 comments (clear)

  1. CNN argues it's worth the money by rolfwind · · Score: 5, Interesting

    http://money.cnn.com/2014/02/2...

    But I will not tech history in the last 20 years is littered with companies that were bought because of instant messaging in one form or another, stuff like Skype, that later on did not really bring it's parent company anything (eBay sold skype to Microsoft at a loss iirc).

    The problem seems to be how to integrate and monetize these services without people jumping ship. Until then, they are hosting a free service that's quite a bit to fund with no obvious revenue stream in sight other than ads.

    Of course, Facebook is an expert on that, so it may turn out well for them. Still, amazing returns on a 4 year old company.

    1. Re:CNN argues it's worth the money by gstoddart · · Score: 5, Informative

      Now that they have plenty of cash, what refrains the WhatsApp founders from starting over a concurrent application ?

      Non-compete clauses in the contract which says they have to give all the money back is my guess.

      If you're buying a company, you pretty much try to lock up the top people to ensure they can't say "piss on you, I'll just make it again".

      When you sell the company, you also sell the IP -- and then they can pummel you for stealing 'their' idea.

      --
      Lost at C:>. Found at C.
  2. My favorite observation... by DdJ · · Score: 5, Interesting

    ...was when someone commented that Sun Microsystems was worth about one third of a chat service.

  3. Re:2d biggest? by EvilSS · · Score: 5, Funny

    This is slashdot, obviously it's in hex! So that would make this the 45th biggest in decimal.

    --
    I browse on +1 so AC's need not respond, I won't see it.
  4. Sometimes I just can't think of a subject by sootman · · Score: 5, Interesting

    At the other end of the spectrum, the biggest bargain ever was NeXT acquiring Apple for negative $429 million.

    --
    Dear Slashdot: next time you want to mess with the site, add a rich-text editor for comments.