The Big Five: Largest Acquisitions by Tech Company
The Big Five tech giants, or “FAAMG”—Facebook, Amazon, Apple, Microsoft, and Google (Alphabet)—have a combined market capitalization of over $4 trillion.
These powerful tech behemoths often devour the talent, technology, or entire businesses of aspiring competitors. Given their financial weight, mergers and acquisitions have become a key tactic in maintaining their strong grip on tech supremacy.
Today’s Chart of the Week explores the world’s most powerful tech companies and their biggest acquisitions to date.
Which Acquisitions Were a Success?
While these tech giants may have had big aspirations for these exceedingly large deals, they have mixed success rates.
Microsoft made its big move 2016 to buy LinkedIn for $26.2 billion, and it’s the most sizable acquisition by any of the Big Five tech companies.
Microsoft’s 5 Biggest Acquisitions:
|LinkedIn (2016)||$26.2 billion||Social Media|
|Skype (2011)||$8.5 billion||Telecommunications|
|GitHub (2018)||$7.5 billion||Software|
|Nokia (2014)||$7.2 billion||Telecommunications|
|aQuantive (2007)||$6.3 billion||Marketing|
The LinkedIn deal was made due to the synergy between the two companies’ offerings, and Microsoft’s desire to gain access to LinkedIn’s 575 million members.
However, not all of Microsoft’s acquisitions have been as successful, such as its 2014 purchase of Nokia’s Devices & Services business for $7.2 billion. This seemed like a smart move at the time, considering the Finnish company held 41% of the global handset market.
Yet, Microsoft sold the asset for a mere $350 million just two years later. Microsoft shifted its strategy and exited the feature phone market, choosing to focus on a narrow, niche market for their hardware.
Amazon has closed more than $20 billion in acquisitions and investments since 2017. This includes the purchase of Whole Foods, which Amazon bought for $13.7 billion, and is the company’s largest acquisition to date.
Amazon’s 5 Biggest Acquisitions:
|Whole Foods (2017)||$13.7 billion||Retail|
|Zappos (2009)||$1.2 billion||Retail|
|Ring (2018)||$1.2 billion||Technology|
|PillPack (2018)||$1 billion||Pharmaceuticals|
|Twitch (2014)||$970 million||Social Media|
From purchases to bolster the AI of smart assistant Alexa, to Wi-Fi enabled doorbell Ring, recent additions clearly show the company intends to cement its presence in people’s homes.
After acquiring Whole Foods, Amazon began offering store discounts to Prime customers, in an attempt to bundle its home offerings and provide a more holistic customer experience.
Alphabet has made several daring moves into the hardware and data science sectors. The company’s biggest acquisition was Motorola, which it bought in 2012 for $12.5 billion.
Alphabet’s 5 Biggest Acquisitions:
|Motorola (2012)||$12.5 billion||Telecommunications|
|Nest (2014)||$3.2 billion||Technology|
|DoubleClick (2007)||$3.1 billion||Marketing|
|Looker (2019)||$2.6 billion||Software|
|YouTube (2006)||$1.7 billion||Social Media|
However, the purchase of Motorola was a bet that didn’t pay off. Alphabet sold off much of Motorola’s assets for less than $3 billion in 2014, a little less than two years after it had originally acquired it.
Alphabet continues to consolidate its acquisitions in order to simplify its organizational structure. DoubleClick, acquired in 2007, merged with Google Analytics 360 Suite under the Google Marketing Platform—making it easier for marketers to access their metrics using one platform.
Out of the Big Five companies, Apple has the fewest acquisitions over $1 billion. Its largest purchase was for Beats Electronics, which it acquired for $3 billion in 2014.
Apple’s 5 Biggest Acquisitions
|Beats (2014)||$3 billion||Music|
|Dialog Semiconductor (2018)||$600 million||Manufacturing|
|Anobit (2011)||$500 million||Manufacturing|
|Shazam (2017)||$400 million||Music|
|NeXT Computer (1996)||$400 million||Technology|
Apple’s increasing music streaming efforts have been evident, with the acquisition of Shazam three years after it purchased Beats Electronics.
In an intriguing recent turn of events, Apple recently announced it will acquire the majority of Intel’s smartphone modem business. This $1 billion deal will allow Apple to build all of its devices in-house, and better prepare the iPhone for the upcoming 5G push.
Facebook’s largest acquisition has been WhatsApp Messenger, which it purchased for $22 billion in 2014. The WhatsApp acquisition is the second largest of the Big Five, following Microsoft’s LinkedIn purchase.
Facebook’s 5 Biggest Acquisitions:
|WhatsApp (2014)||$22 billion||Social Media|
|Oculus (2014)||$2 billion||Technology|
|Instagram (2012)||$1 billion||Social Media|
|LiveRail (2014)||$500 million||Marketing|
|Onavo (2013)||$200 million||Analytics|
Aside from absorbing any competitors who encroach on Facebook’s turf—such as WhatsApp and Instagram—Facebook’s takeovers have been aimed at venturing into uncharted territory. The acquisition of virtual reality manufacturer, Oculus, is evidence of Facebook’s bet on virtual reality as the future of engagement.
“After games, we’re going to make Oculus a platform for many other experiences. Imagine enjoying a court side seat at a game, or studying in a classroom of students and teachers all over the world —just by putting on goggles in your home.”
Predicting the Next Shift
The Big Five are some of the most influential companies in the world today.
Beyond rapidly reshaping the global tech landscape, these acquisitions provide important context on how tech companies consolidate power—and, more importantly, what will fuel their next phase of growth.
The Road to Recovery: Which Economies are Reopening?
We look at mobility rates as well as COVID-19 recovery rates for 41 economies, to see which countries are reopening for business.
The Road to Recovery: Which Economies are Reopening?
COVID-19 has brought the world to a halt—but after months of uncertainty, it seems that the situation is slowly taking a turn for the better.
Today’s chart measures the extent to which 41 major economies are reopening, by plotting two metrics for each country: the mobility rate and the COVID-19 recovery rate:
- Mobility Index
This refers to the change in activity around workplaces, subtracting activity around residences, measured as a percentage deviation from the baseline.
- COVID-19 Recovery Rate
The number of recovered cases in a country is measured as the percentage of total cases.
Data for the first measure comes from Google’s COVID-19 Community Mobility Reports, which relies on aggregated, anonymous location history data from individuals. Note that China does not show up in the graphic as the government bans Google services.
COVID-19 recovery rates rely on values from CoronaTracker, using aggregated information from multiple global and governmental databases such as WHO and CDC.
Reopening Economies, One Step at a Time
In general, the higher the mobility rate, the more economic activity this signifies. In most cases, mobility rate also correlates with a higher rate of recovered people in the population.
Here’s how these countries fare based on the above metrics.
|Country||Mobility Rate||Recovery Rate||Total Cases||Total Recovered|
Mobility data as of May 21, 2020 (Latest available). COVID-19 case data as of May 29, 2020.
In the main scatterplot visualization, we’ve taken things a step further, assigning these countries into four distinct quadrants:
1. High Mobility, High Recovery
High recovery rates are resulting in lifted restrictions for countries in this quadrant, and people are steadily returning to work.
New Zealand has earned praise for its early and effective pandemic response, allowing it to curtail the total number of cases. This has resulted in a 98% recovery rate, the highest of all countries. After almost 50 days of lockdown, the government is recommending a flexible four-day work week to boost the economy back up.
2. High Mobility, Low Recovery
Despite low COVID-19 related recoveries, mobility rates of countries in this quadrant remain higher than average. Some countries have loosened lockdown measures, while others did not have strict measures in place to begin with.
Brazil is an interesting case study to consider here. After deferring lockdown decisions to state and local levels, the country is now averaging the highest number of daily cases out of any country. On May 28th, for example, the country had 24,151 new cases and 1,067 new deaths.
3. Low Mobility, High Recovery
Countries in this quadrant are playing it safe, and holding off on reopening their economies until the population has fully recovered.
Italy, the once-epicenter for the crisis in Europe is understandably wary of cases rising back up to critical levels. As a result, it has opted to keep its activity to a minimum to try and boost the 65% recovery rate, even as it slowly emerges from over 10 weeks of lockdown.
4. Low Mobility, Low Recovery
Last but not least, people in these countries are cautiously remaining indoors as their governments continue to work on crisis response.
With a low 0.05% recovery rate, the United Kingdom has no immediate plans to reopen. A two-week lag time in reporting discharged patients from NHS services may also be contributing to this low number. Although new cases are leveling off, the country has the highest coronavirus-caused death toll across Europe.
The U.S. also sits in this quadrant with over 1.7 million cases and counting. Recently, some states have opted to ease restrictions on social and business activity, which could potentially result in case numbers climbing back up.
Over in Sweden, a controversial herd immunity strategy meant that the country continued business as usual amid the rest of Europe’s heightened regulations. Sweden’s COVID-19 recovery rate sits at only 13.9%, and the country’s -93% mobility rate implies that people have been taking their own precautions.
COVID-19’s Impact on the Future
It’s important to note that a “second wave” of new cases could upend plans to reopen economies. As countries reckon with these competing risks of health and economic activity, there is no clear answer around the right path to take.
COVID-19 is a catalyst for an entirely different future, but interestingly, it’s one that has been in the works for a while.
Without being melodramatic, COVID-19 is like the last nail in the coffin of globalization…The 2008-2009 crisis gave globalization a big hit, as did Brexit, as did the U.S.-China trade war, but COVID is taking it to a new level.
—Carmen Reinhart, incoming Chief Economist for the World Bank
Will there be any chance of returning to “normal” as we know it?
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