Over the years, acquisitions and mergers have been occurring in virtually all sectors/aspects of business. The internet has also has its own share of acquisition with one company acquiring the other in order to benefit both in long and short term. Usually, a big company acquires and buy out completely a smaller company that it deems may have a positive effect on its operations. Internet acquisitions have resulted into having large corporations and companies by having larger market share for the acquiring company. Majorly, Internet acquisitions has brought in great gains in profit and reduced competition for the acquiring company. A failed acquisition is one that is overpriced, overblown and has no gains or benefit for the acquiring company.
The five smartest internet acquisitions are as follows.
- 1. Ebay acquired pay pal
Ebay is a popular online store that sells all categories of products ranging from electronics, books, gifts, cars, games to all useable household items. The web based company acquired pay pal which is a major payment processing company. PayPal is the most acceptable and trusted form of payments. Presently the no.1 secured payment service in the world and accepted by other payments platforms worldwide. By this single acquisition, Ebay has placed itself as the online store of choice to beat.
- 2. Amazon bought diapers.com
Amazon, a leader in household items had a major acquisition of diapers in 2010. Both actually sells similar products is similar and various categories. Diapers is more established in baby and children products as it’s focused on delivering top of the range accessories. Amazon’s decision to buy diapers is definitely the best move in reducing competition to its products. Reaching a wider audience and large customer base, the deal rakes in high profit for Amazon.
- 3. YouTube acquired by Google
Internet search engine giants, Google bought over video streaming and sharing based company, YouTube in 2006. YouTube is the leader in online video sharing where users upload and share their videos online for friends to see. The acquisition gives Google a wider base as it is able to incorporate its ads while streaming videos in YouTube.
- Hotmail acquired by Microsoft
Windows parent company, Microsoft acquired Hotmail in 1998 for about $400m. They were able to leverage on Hotmail database capabilities and web audience/users thus incorporating msn.com with hotmail.
- 5. Android acquired by Google
Android, software and applications making company was acquired by Google in 2005. Its mobile operating systems now run on over 33% of all smart phones worldwide. The future looks better for Android based phones/tab thus equating larger profits for Google. With even more acquisitions by Google, it has reflected in its high share price thus giving investors higher returns on their investments.
Whichever way, Acquisitions will always come and go. While some makes the acquiring company smile to the bank, a wrong investment move can create untold loss to a company. Choice wisely.