5 Biggest Tech Acquisitions That May Never Be Topped

Among so many tech acquisitions, which were the biggest tech acquisitions that may never be topped?

Mergers and acquisitions have long been a valuable tool for companies to expand their reach and add capabilities. Companies acquire or merge to diversify their business models, increase their capabilities, or gain a competitive advantage. This is especially true in the tech sector, where certain technologies or platforms can take years to develop, but can be had instantly for the right price.

In this article we’ll take a look at five of the most important tech acquisitions of all time, in terms of either their value to the acquiring company, or what the acquisition otherwise allowed the company to accomplish. Those acquisitions were made by Facebook Inc (NASDAQ:FB), Alphabet Inc (NASDAQ:GOOGL), Microsoft Corporation (NASDAQ:MSFT), HP Inc (NYSE:HPQ), and eBay Inc (NASDAQ:EBAY).

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Withouth the further ado, we present you biggest tech acquisitions that may never be topped:

5. Facebook’s Acquisition of Instagram

In April 2012, Facebook Inc (NASDAQ:FB) announced that it was spending a whopping $1 billion to acquire startup social network Instagram, run by two 20-somethings, which had a mere dozen employees and practically no revenue. Today, Instagram has over 400 million users, more than Twitter. According to Credit Suisse, Facebook Inc (NASDAQ:FB) made around $570 million in revenue in the first quarter of 2016 from Instagram. This figure accounts for 10% of Facebook’s overall estimated revenue for the period. The investment firm also predicts that Instagram will add $3.2 billion to Facebook’s revenue for the full 2016 year. Instagram was valued at $500 million when Facebook acquired it, and would arguably be worth 20-times that or more a short four years later, making it one of the best tech acquisitions ever.

4. Google’s Acquisition of YouTube

Alphabet Inc (NASDAQ:GOOGL) has bought roughly 170 companies since its launch as Google in 1998. But its timely acquisition of YouTube in 2006 dwarfs all of its deals due to the long-term and explosive growth opportunities it tapped into with this deal. Alphabet Inc (NASDAQ:GOOGL) acquired YouTube 10 years ago for a hefty $1.6 billion when YouTube was just over a year old. YouTube had around 50 million users worldwide at the time of the deal. Today, YouTube has over a billion users and is the unrivaled video content king. Google beat companies like Microsoft, Viacom, Yahoo, and the News Corporation in its bid to acquire YouTube, and that has proven to be a major coup, with estimates now putting YouTube’s value in the $100 billion range. There are approximately 400 hours of new video content uploaded to YouTube per minute as of the end of 2015, and for its fiscal first quarter of 2017, Google posted $22.45 billion in revenue, a good chunk of which came from YouTube video ads.

On the next page we’ll discuss three more tech acquisitions that changed the course of the global technology sector.

3. Microsoft’s Acquisition of 86-DOS

Microsoft Corporation (NASDAQ:MSFT) acquired 86-DOS, also known as QDOS or “quick and dirty operating system”, in July 1981. As we know, Microsoft’s entire empire was started with its MS-DOS operating system. MS-DOS was a revamped version of 86-DOS. Microsoft acquired a non-exclusive license for 86-DOS for $25,000 when IBM approached it to make a 16-bit OS for its machines. A few months after, Microsoft acquired all rights to 86-DOS for $50,000. Microsoft Corporation (NASDAQ:MSFT) tweaked and customized this operating system for IBM computers, and that’s when Bill Gates’ remarkable journey of innovation and fame took off, as the OS was later transformed into the behemoth that is Windows, which is why this is one of the biggest tech acquisitions that may never be topped. The original creator of 86-DOS was Tim Paterson of Seattle Computer Products. And now, let’s see the top two biggest tech acquisitions that may never be topped.

2. HP’s Acquisition of Compaq

In 2001, The Hewlett-Packard Company or HP, which is now HP Inc (NYSE:HPQ), stunned the world when it announced its $25 billion acquisition of its main rival, Compaq. The deal caused ripples across the computing market, as both companies had overlapping supply chains and common contractors. The deal was also not welcomed by HP’s shareholders. The company’s outspoken director Walter Hewlett, who is also the son of HP’s co-founder, even went into a proxy battle to kill the deal. A decade after the deal, HP said in a statement that the decision to buy Compaq proved to be correct in retrospect, as both companies achieved a lot more together than they would have apart. But in 2015, HP split into two companies: Hewlett Packard Enterprise Co (NYSE:HPE), which covered its software and services business, and HP Inc (NYSE:HPQ), which contained the former company’s PC, printers and consumer products business. After buying Compaq, several problems marred HP’s reputation and business, including failed acquisitions like 3COM and EDS, and scandalous and ineffective management, which ultimately resulted in the ouster of Chairwoman Patricia Dunn and the resignations of two CEOs, Mark Hurd and Leo Apotheker.

1. eBay’s Acquisition of PayPal

In August 2002, eBay Inc (NASDAQ:EBAY) announced its plans to acquire PayPal, which had gone public earlier that year. PayPal was founded in 1998 by tech luminary Peter Thiel, along with Max Levchin, Luke Nosek and Ken Howery. eBay paid $1.5 billion for the company that had come up with a disruptive idea and business model based on online payments. eBay was the leading auctions and e-commerce website in 2002, and most of the payments made by buyers and sellers on eBay’s websites was done via PayPal. A whopping 61% of PayPal’s transactions came from eBay in 2002. In July 2015, eBay Inc (NASDAQ:EBAY) set PayPal free again, as a separate publicly-traded company amid pressure from activist investor Carl Icahn. As of January 2016, Paypal Holdings Inc (NASDAQ:PYPL) has 179 million active accounts and is currently valued at nearly $50 billion

That being said, these were the biggest tech acquisitions that may never be topped. 

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