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Visualizing 15 Years Of Acquisitions By Apple, Google, Yahoo, Amazon, And Facebook

Hi Folks,

Its been a while! I wanted to share a very interesting article from Josh Constine and Tech Crunch about 15 years of acquisitions by leading tech giants. Check this out. Pretty interesting stuff.

-DF

Visualizing 15 Years Of Acquisitions By Apple, Google, Yahoo, Amazon, And Facebook

You grow old, you slow down, and you die. That is, unless you can inject some fresh blood. After watching the last generation of tech giants wither or stagnate, today’s juggernauts are relying on acquisitions to keep them young and relevant. Check out the interactive infographic below to compare the size, frequency, and focus of the last 15 years of acquisitions by Apple, Amazon, Google, Yahoo, and Facebook.

Business insurance provider Simply Business created this infographic, which is only available here on TechCrunch. Each dot’s size represents the price paid for that startup if it was disclosed. Scroll over them for a link to learn more about the deal. The plus and minus buttons in the top right let you zoom in on specific time periods. Select categories at the top to filter for certain types of acquisitions. The Frequency toggle reveals phases when companies did heavy buying. And you can click any of the tech giants’ logos to view a complete list of their full-scale acquisitions (small acqui-hires excluded). Sorry to our mobile readers, but it’s much easier (possible) to navigate this on the web.

Trends crystallized by the Simply Business infographic include:

The drought of acquisitions by Yahoo in 2011 and 2012 before Marissa Mayer began her buying spree after being named CEO.
Apple has kept the price of its acquisitions low despite its huge cash reserves, as it prefers to buy for technology rather than market share.
Facebook accelerated its talent-focused acquisitions following its IPO to combat brain-drain.
While Steve Jobs saw acquisitions as a “failure to innovate,” Tim Cook has been proactive about buying companies to bring new intellectual property to Apple.
There was a recession in acquisitions in the “Rest In Peace: Good Times” era from 2008 to 2009.
Social, mobile, and hardware acquisitions have come into favor as search, media, and advertising buys have waned in the past few years

And the biggest acquisitions (with disclosed prices) by the giants were:

  • Apple – Anobit ($390 million), AuthenTec ($356 million)
  • Amazon – Zappos ($900 million), Kiva Systems ($775 million)
  • Google – Motorola Mobility ($12.5 billion), Nest ($3.2 billion), DoubleClick ($3.1 billion), YouTube ($1.65 billion)
  • Yahoo – Broadcast.com ($5 billion), Overture ($1.83 billion), Tumblr ($1.1 billion)
  • Facebook – WhatsApp ($19 billion), Instagram ($1 billion, closed at $715 million)

YOU CAN READ THE WHOLE ARTICLE HERE

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Written by David Frederick

February 26, 2014 at 12:01 PM

Series A Crunch And The Lean Funding Model

Duncan Davidson of Bullpen Capital recently presented a very interesting concept at the December 2011 TechCrunch conference in Tokyo. At the conference he discussed how the lean startup model had given rise to a lean finance model for venture capital.

The concept: keep funding lean for as long as possible, until the startup has validated its model and is beginning to scale. Usually it takes around six months of metrics to be in position to raise a big round. That “shovel-in” round is where the lean model catches up to the traditional venture model, as shown in the chart.

 

 

 

 

 

 

Image: BullPen capital

By using this process, the founders have preserved more ownership as well as their options. Most startups are not suited to become billion-dollar babies, and exit via M&A, often quickly (a “quick flip”). Lean funding makes the quick flip attractive both to the founders, who often each pocket at least $10M, and the funders, who make larger multiples on their invested capital by putting less in. If this happens quickly, the IRR can be quite attractive to the LPs who invest into the lean venture funds.  They have learned to be wary of big venture, where their capital is tied up for ten or more years.

To learn more, read the TechCrunch article and view the interview with Duncan, click here!

-DF

Written by David Frederick

December 6, 2011 at 5:57 PM

My Dear Friend Thucydides

As we American’s sit with a $15 Trillion deficit (and growing), the Euro-zone facing imminent collapse or at best catastrophic reorganization, and a Chinese economic bubble expanding, I am reminded of what my dear friend and Greek historian Thucydides once said about 400 years before the birth of Jesus Christ. ” Democracies always self destruct because the people will spend them into bankruptcy”.  Perhaps old Thucydides wasn’t yet introduced to socialism and communism, democracy being an ancient Greek idea. Surely he would have seen the folly of socialism and communism don’t you think? In fact, I bet he would have said” Socialism and Communism WILL self destruct because the government WILL spend them into bankruptcy.”

I wonder what he would say about the mess we’re in now, not to mention what is going on in his beloved Greece? I bet he would have a hard time differentiating between what we call democracy, socialism and communism aside from the apparent end result of each.

Why is it that an ancient Greek historian knew of this basic principle thousands of years ago and yet the most highly educated political, legal, economic, and financial minds of the modern world fail to grasp it? Rather ironic don’t you think?

-DF

Written by David Frederick

November 29, 2011 at 12:23 PM

Posted in Economics, General

Here’s A Cheery Thought!

Here’s a cheery thought…

According to the latest daily statement from the U.S. Treasury, the U.S. government had an operating cash balance of $73.8 billion at the end of the day yesterday. Apple’s last earnings report (PDF here) showed that the company had $76.2 billion in cash and marketable securities at the end of June.

In other words, the world’s largest tech company has more cash than the world’s largest sovereign government. That’s because Apple collects more money than it spends, while the U.S. government does not. According to the CBO and U.S. Treasury, if you taxed everyone in the U.S. at 100% tax rate, you would not put a dent into the $14.5 trillion dollar defect. Still don’t think there is a spending problem in Washington?

-DF

Written by David Frederick

July 29, 2011 at 9:08 AM

S Curves Everywhere

If you have ever worked with predictive models and trend mapping you are no doubt familiar with the S curve. The ubiquitous S-curve (also known as the sigmoid function) has long been recognized by economists, technologists, and scientists as a strong tool for understanding patterns. Now professor Adrian Bejan at Duke University, with collaborator Sylvie Lorente from the University Toulouse, has developed an exiting new theory that explains the reason for the prevalence of this particular pattern throughout nature and the man-made world.

Their research shows that this phenomenon can be predicted entirely by recognizing in it a flow. The flow is not by diffusion alone, rather it is a combination of tree-shaped “invasion” by convection, followed by “consolidation” by diffusion perpendicular to the invasive lines. The S curve is not unique: its scales depend on the relative magnitude of the speed of the invading lines and the diffusivity perpendicular to the lines. Tree-shaped invasion covers the territory with diffusion much faster than line-shaped invasion. The predicted S-curve flow architecture unites the designs of spreading flows and collecting flows (e.g., mining, fossil fuel extraction, Hubbert peak) in all the realms of nature: animate, inanimate, and human-made.

Economic trends, population growth, the spread of cancer, or the adoption of new technology seem to follow certain patterns, says Bejan. A new technology, for example, begins with slow acceptance, followed by explosive growth, only to level off before “hitting the wall. Rebecca Henderson – one of my favorite MIT Sloan Professors who is now at Harvard Business School had some very interesting theories and practical models for working with S-Curves when developing a successful product and technology strategy. You should also check out her work as well.

Bejan’s theory, known as the constructal law, uses a large river basin as a visual description of flow systems, growing fast and far, with smaller branches growing laterally from the main channels. It is based on the principle that designs of flow systems develop over time by facilitating flow access — reducing and distributing friction or other forms of resistance.

  • A new technology, for example, after a slow initial acceptance can be imagined moving fast through established, though narrow, channels into the marketplace. This is the steep upslope of the “S.”
  • As this technology matures, and its penetration slows, any growth, or flow, moves outward from the initial penetration channels in a shorter and slower manner.

If your involved in predictive models, product development, technology development or analysis this is a very interesting study and I recommend you check it out. You can get the study below:

-DF

Ref.: A. Bejan and S. Lorente, The constructal law origin of the logistics S curve, Journal of Applied Physics, 110, 024901 (2011); [DOI:10.1063/1.3606555]

Written by David Frederick

July 21, 2011 at 9:49 AM

American Insourcing

OK, here is some potential good news for the resurgence of American manufacturing. Check out this article from Ben Forer at ABC news.

-DF

 Manufacturing in America: US Set for a ‘Manufacturing Renaissance’

By BEN FORER
May 13, 2011

In the next five years, the U.S. will experience a “manufacturing renaissance,” according to a new analysis.

As wages in China increase, flexible work rules and government incentives in the U.S. will make America one of the cheapest places to manufacture goods in the developed world, the Boston Consulting Group (BCG) analysis suggests.

“If the trend plays out, I think you’ll see manufacturing growing and expanding in the U.S.,” said Michael Zinser, one of the authors of BCG’s analysis on manufacturing. “What we’re expecting is that companies will step back and rethink their networks, rethink their supply chains.”

Chinese wage rates likely will continue to grow by 15 to 20 percent year over year, Zinser said. When the increase in wages is combined with the increasing value of the yuan, the wage gap between the U.S. and China is narrowing rapidly.

“China is no longer expected to be the default low-cost manufacturing location for those companies who are looking to supply the U.S. market,” Zinser told ABC News. “What we would expect to see is a convergence in terms of the wage rates to what we’re seeing in the U.S. today.”

Harold Sirkin, lead author of the analysis on manufacturing, expects the convergence to occur “by around 2015.”

“As a result of the changing economics, you’re going to see a lot more products ‘Made in the USA’ in the next five years,” said Sirkin.

Romain Wacziarg, an economics professor at the University of California, Los Angeles, sees other factors involved.

“I agree that it’s possible that manufacturing will come back, but I don’t think it’s due to rising costs in China,” he said. “I think it’s due more to the depreciation of the dollar … not that wage costs are rising in China and not the U.S.”

Currently, according to BCG, U.S. workers are three times more productive than their Chinese counterparts. But Wacziarg said the increase in wages indicates an increase in producitivy.

“It’s more expensive to use a unit of labor there [China],” he said, “but that unit of labor is getting more productive.”

As wages in China rise, Zinser said, some companies may decide to manufacture in the U.S., though others will look for lower wages in other countries.

But one of the advantages U.S. manufacturers have, according to BCG, is that the work force is becoming more flexible.

Kevin Sauder, president and CEO of Sauder Furniture, recently started sourcing component parts regionally, a process his purchasing team called “insourcing.”

“Supporting local and American jobs is one factor that gets considered,” Sauder told ABC News. “It’s not the main factor, but it’s one thing that gets considered. All things being equal, we would always prefer to go with a regional manufacturer. … Using regional components improved our ability to be flexible in new product development.”

The change allowed the company to get more contracts, Sauder said, because it was able to build prototypes more quickly for stores such as Walmart and Ikea because the component pieces arrived weeks earlier.

“Opportunities like that are worth a little extra money for the flexibility and speed,” said Sauder. “I think that’s where local and regional manufacturers do have an advantage … flexibility and speed to market.”

Even though the U.S. manufacturing sector maybe be poised for a comeback, Zinser cautioned that it did not mean China is on the decline.

“China is going to continue to be a major global player,” said Zinser. “China is still a large market and many companies are going to want to continue supplying that market.”

U.S. consumers should expect industries such as construction equipment and appliances to be impacted first, he said, while industries such as textiles and consumer electronics may never be affected.

“Where you have lower labor content as an overall percentage of your total costs and more modest volumes, we’d likely see those types of industries certainly having an impact sooner,” Zinser said. “For industries where you have very high volumes, higher labor content … we would expect that those are likely to stay in lower-cost environments.”

Written by David Frederick

May 17, 2011 at 5:00 PM

More Magic 9

In the spirit of this weeks discussion on the importance and effectiveness of certain numbers used in marketing, I wanted to share another short piece of information on the use of numbers and the psychological effects they have on consumers buying habits.

According to Science Direct – The Journal of Retail and Consumer Services, sellers of high-priced goods such as hotel rooms tend to price their offerings with round numbers, but research indicates they should take a lesson from grocers and create prices ending in odd numbers — especially 9 (Remember my previous postings on the magic of using number 9? – DF).

In a study of tourists, Sabine Kleinsasser of Vienna University of Economics and Udo Wagner of the University of Vienna found that even when it comes to expensive goods, consumers prefer prices ending in 9. In food retailing, 60% of prices end in 9 and 90% end in either 9 or 5.

Further, this investigation considers how consumers of higher-priced goods (i.e., tourism services that are neither cheap nor luxurious) perceive odd and even prices and reveals whether these perceptions differ from previous findings that have nearly exclusively related to low-priced goods (e.g., food). This study therefore addresses a new realm and contributes several findings on price endings in reference to goods priced at higher levels. First, consumers of higher-priced goods might be influenced by price endings, just as consumers of low-priced goods are. Second, personal involvement and price interest have a moderating effect on perceptions of such price endings. Third, odd prices also make sense for sellers of higher-priced goods.

-DF

To read the full report click here!

Written by David Frederick

May 4, 2011 at 10:39 AM