Following this morning’s announcement from Nokia and Microsoft CBR looks at some other big technology tie-ups, mergers, acquisitions, funding and/or strategic alliances. Some went well, others less so…
AOL and Time Warner, January 2000
The daddy of all technology tie-ups. The mega merger created a $350m giant, a combination of old media and new struck at the height of the dotcom bubble. Steve Case, AOL’s chairman at the time called it a "historic moment, in which new media has truly come of age." AOL Time Warner didn’t quite leave up to the expectations. In 2003 AOL was dropped from the title and in 2009 it was spun-off, ending what has been called the worst merger in history.
HP and Compaq, May 2002
After HP spun-off its measurement, components, chemical analysis and medical businesses in 1999 it focused heavily on its computing division. Carly Fiorina, CEO at the time, championed a merger with Compaq.
Despite opposition from HP board member Walter Hewlett (son of co-founder William Hewitt), the $25bn deal went through, creating the world’s largest PC maker. At the time, Compaq was also the biggest shipper of Windows servers, and Fiorina’s argument was that adding that business to HP’s strength in Unix servers would give it a better platform with which to attack IBM, Sun and the like.
EMC and VMware, December 2003
Investing $625m in virtualisation player VMware has proved to be a great bit of business for EMC, giving it a foothold in the hot virtualisation and cloud space. VMware is now doing around $830m in quarterly revenue.
IBM and Lenovo, December 2004
A surprise move saw IBM sell its PC division to Chinese maker Lenovo, at the time relatively unknown outside its home country. The deal sees Lenovo become the third biggest PC maker in the world. IBM also took an 18.9% stake in Lenovo as part of the deal and shifted its focus to its software and services division.
Microsoft and Novell, November 2006
Hailed by Steve Ballmer as a way to bridge the divide between open-source and proprietary source software, the deal was a joint patent agreement to cover their respective products. They promised to work more closely together in order to improve their software’s ability to work with other software, setting up a joint research facility.
It was clear what was in it for Novell, not least an up-front payment of $348m from Microsoft. But the open source community was up in arms, accusing Novell of ‘selling out’ and expressing concern that the GNU General Public Licence could not accommodate such an agreement.
Microsoft and Facebook, October 2007
Microsoft saw fit to pump $240m in to social networking phenomenon Facebook for a 1.6% stake, valuing the social networking phenomenon at $15bn. Facebook was only four years old at this point and expected revenue that year of £30m, suggesting Microsoft had paid over-the-odds for its stake.
Facebook’s most recent round of funding however saw it take on another $1.5bn from investors, including $450m from Goldman Sachs, valuing it at $50bn. Estimates put its revenue at around $2bn in 2010, up from $775m in 2009 and $280m in 2008.
Microsoft and Yahoo, July 2009
After a failed attempt to buy the ailing search firm in a massive $44.6bn deal, Microsoft returned and struck a deal with Yahoo to, "power Yahoo search while Yahoo will become the exclusive worldwide relationship sales force for both companies’ premium search advertisers," as the companies put it.
The aim, of course, was to claw back some of the search market share from Google. The latest figures from NetMarketShare, however, claim Google is still dominating with 85.37% of the market, with Yahoo on 6.14% and Bing further behind on 3.68%.
Oracle and Sun, April 2009
It’s fair to say the jury is still out on this one. Oracle’s $7.4bn acquisition of the ailing Sun Microsystems was met by a ferocious backlash from the open source community, worried about Oracle’s ownership of MySQL and Sun co-founder, former CEO and chairman Scott McNealy, CEO Jonathan Schwartz and Java founder James Gosling all left the company over the following year or so.
Oracle wasted no time with the integration of Sun and in September 2010 announced Exalogic Elastic Cloud, a combination hardware and software that offers a "cloud in a box," according to CEO Larry Ellison. In June 2010 the company estimated that Sun had contributed $400m to non-GAAP operating income during Q4, and reckons for FY11 that will rise to $1.5bn and $2bn the following year.
HP and Palm, April 2010
A $1.2bn deal for struggling Palm propelled HP into the smartphone market and gave it access to the webOS platform. HP recently unveiled two new mobile phones and a new tablet, all running the mobile operating system. Interestingly, HP also suggested it would push webOS toward PCs, taking it in to direct competition with Microsoft.
Intel and McAfee, August 2010
One of the more surprising deals of recent years saw the world’s biggest chip firm pay $7.7bn for the security giant. "A somewhat puzzled ‘Unhh?’ has swept around the world in reaction to Intel’s unexpected swoop on security player McAfee," as CBR put it at the time. "The puzzle is ‘why’ – hence the confused reactions. On the surface, Intel has a more or less coherent cover story for the purchase, which is all about putting security right into the hardware level of the stack, more specifically into the mobile market."
"I wasn’t surprised that McAfee was acquired, it was clear that they were for sale, but was surprised about Intel," John Brigden, Symantec SVP EMEA told CBR. That seems to sum up the general reaction.
