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Ten Corporate Acquisitions That Changed The Game

Companies
Ten Corporate Acquisitions That Changed The Game

This month, Google acquired Nest, a connected-device company that makes smart thermostats and smoke detectors. Astute readers will have already caught on as to why Google have made the purchase. This move gets Google one giant step closer to a fully integrated and connected home controlled application. In a few short years, we can pretty much expect Google to introduce its own digital personal assistant into our homes.

On its own, Nest has been recognized as a leader in app-controlled household devices. Their devices use advanced detection technology that can recognize the subtle differences in potential triggers, even going so far as to types of smoke. That’s only today – imagine what the future will bring. With Google’s technology and resources, Nest will surely make a leap in product design and application.

Nest’s leadership is no stranger to market game-changers. Nest’s CEO Tony Fadell started Nest in 2010, and formerly served as the Senior Vice President of the iPod division at Apple. The iPod, first launched in 2001, was the device that began Apple’s ascent to its privileged position in the tech world of today. Even the Hollywood movie Jobs began with Steve Jobs’ introduction of the iPod, meant to symbolize Apple’s return.

When Fadell left Apple in 2008, it was only a couple of years later that he started working on thermostats out of a garage in California. By 2011, Google started to show interest in Nest. Google’s acquisition of the company can be a real game-changer for a plethora of reasons. For starters, Nest is a growing business in the US that, until today, lacked global reach. With Google’s influence, Nest alone can report record sales. Moreover, Nest has a product that integrates perfectly with Google’s future plans. Thanks to this acquisition, The Siri or JARVIS of our home is closer than we once imagined.

Huge corporate acquisitions like this one are nothing new, dating back well over 120 years. Time has proven that there is no secret sauce to their success. Sometimes these things pan out, and other times they don’t. Here are the top 10 game-changing acquisitions of all-time.

10. 1928 – Chrysler Acquires Dodge In 1928 (Undisclosed Amount)

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Formerly owned by the Dodge Brothers, Dodge was originally a supplier of parts for most local Detroit automotive manufacturers. Unfortunately, the Dodge Brothers died suddenly and the company was eventually sold to Dillon Read & Co.  As sales declined, Dillon Read & Co. did not hold onto the company very long, and Chrysler made an offer to purchase Dodge in 1928.

Chrysler has carried over hundreds of models, most of which have come and gone. But Dodge has stuck around surviving multiple changes in ownership, mergers, and even bankruptcy. Without it, we will never know how much sooner bankruptcy would have knocked on Chrysler’s door.

9. 1994 – BMW Acquires British Rover Group In 1994 (Undisclosed Amount)

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In the 90s, BMW made two key acquisitions. In 1992 they acquired a sizeable majority of a design studio in California. But it was their 1994 acquisition that would pay dividends seven years later. When BMW acquired the British Rover Group in 1994, they acquired the rights to the Rover, Land Rover, MG, and Austin and Morris.

In 2000, poor sales and cost efficiency in Rover prompted BMW to sell the MG and Rover brands to Phoenix Consortium. Ford Motor Company took the rights to the Land Rover, and BMW maintain the rights to the Mini (Austin and Morris). In 2001, BMW launched the Mini, which today sells over 300, 000 units per year.

8. 2011 – Google Acquires Motorola 2011 For $12.5 Billion

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Google has acquired over 140 companies and most people had not heard of any of them before they became part of Google. Motorola was not one of those. Before Google acquired them, Motorola was a house-hold brand, making cell phones, wireless network infrastructure equipment, and broadcast network products. Although Google had been working closely with Motorola since 2009, it wasn’t until Google’s acquisition of Motorola that Google’s footprint in the smartphone market really took shape.

7. 2010 – Apple Acquires Siri Inc. (Undisclosed)

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Siri was an actual company before it became known solely as an intelligent personal assistant on Apple’s iOS. Many may not know that Siri was originally an app in the App Store. In 2010, Apple acquired Siri and introduced her on their new iPhone 4S in 2011. Siri, a Norwegian name, was a real game-changer in smartphone capability.

No other software could compete with Siri’s functionality, and the app made the 4S a must-have among smartphone buyers. The product now has to fend off several competitors, though its popularity has not yet been matched by other virtual assistants.

6. 1997 – Yahoo Acquires RocketMail 1997 For $92 Million

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Hotmail will always be remembered as the first mainstream free webmail service, but there was another that came about shortly after– RocketMail. When RocketMail was first introduced in 1997, it gained in popularity rather quickly, and rivaled Hotmail in email accounts in no time at all. Four11, the developer of RocketMail, sold it to Yahoo for $92 million. Yahoo essentially copied and pasted RocketMail into its platform, quickly making it a key player in the online world, and no doubt driving other competitors, like the eventually dominant Gmail, to enter the fray.

5. 2005 – Google Acquires Android For $50 Million

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The most-used operating system by smartphones worldwide is Google’s Android. Android, in collaboration with Motorola, has solidified Google’s place in mobile communications, and put real pressure on competitors like Apple and Microsoft. The company that came up with Android, known as Android Inc, was originally backed financially by Google, and then purchased by the tech giant in 2005. The acquisition of Android provided Google with an advanced operating system that would rival Apple’s iOS, one that has since found footholds in the tablet and consumer electronics spaces.

4. 2006 – SBC Communications Acquires AT&T Corp For $16 Billion

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It’s a rather complicated history of mergers, de-mergers, and spin-offs. SBC, formerly known as Southwestern Bell, was one of 7 original “Baby Bell” companies that were split from the original AT&T. The split was forced by government regulations to have AT&T de-centralize.  Southwestern Bell eventually grew with the help of mergers and acquisitions.

In 1995, it decided to change its name to SBC Communications Inc. to re-brand as a national company. Eleven years later, it acquired the same company that it had once belonged to, and expanded its reach to become one of the largest mobile carriers in America.

3. 1994 – Quaker Oats Company Acquires Snapple Beverage Company For $1.7 Billion

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Some game changing acquisitions are not all that positive. In Quaker’s case, the game-changer was one of major disappointment. When Quaker acquired Snapple in 1994 for $1.7 billion, they do so with great intention, hoping to extend Snapple’s global reach. Instead, expectations didn’t work out, and the company struggled to build any new market share. Its struggles are attributed to a shift in marketing campaigns and the distribution of the product into major chain stores.

Despite that, Snapple continues on as a prominent and popular beverage line. It was eventually sold by Quaker for $300 million, and then purchased for $1.45 billion by Cadbury Schweppes. After a period of a few years, it wound up a part of the Dr. Pepper Snapple Group.

2. 2012 – Facebook Acquires Instagram For $1 Billion

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Perceived by some as a defensive move rather than offensive, Facebook’s acquisition of Instagram has paid off in a number of ways. By acquiring Instagram, Facebook eliminated a competitor and prevented another buyer from moving in. In addition, the rapidly growing user base would bolster Facebook’s social media market share. The app continues to run mostly autonomously, not unlike the acquisition that makes the number one spot.

1. 2006 – Google Acquires YouTube For $1.65 Billion

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At the time of this purchase, Google was heavily criticized for paying $1.65 billion, as many felt the site was worth a lot less. Today, YouTube is not just a website, or even a mere verb – “just YouTube it!” It’s become a part of the fabric of our modern culture. It is used by millions upon millions, and is at the centre of pop culture and even international politics.

YouTube was one of the fastest growing websites of all-time. In just a short year, the video sharing website had over 100 million views per day. Within 18 months, the three founders of YouTube, former PayPal employees, sold the website to Google for $1.65 billion. Today, YouTube receives an average of three billion views per day.

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