Google mergers and Facebook acquisitions

Alastair Aitken 11 March 2014 0




When a company you’re involved with talks about mergers and acquisitions, it really is prudent to listen to the alarm bells ringing in your head. It’s a struggle to recall a time when acquisitions, buy-outs or even sell-outs really had a positive effect on everyone involved. Is there something wrong when an organisation’s ambition is limited to providing great customer service rather than trying to expand its customer base as quickly as possible?

Point in case is DigitalOcean. Due to its brilliant documentation, low prices and great performance, I’ve been sorely tempted to use DigitalOcean for a startup project. However, the announcement that DigitalOcean has closed a new round of funding is a timely reminder to look at the long term aims of any potential supplier. DigitalOcean is doing a great job at the moment but is its core competency about to shift towards, “expanding its offerings to as many customers in as short a space of time as possible and then selling itself to the highest bidder”?

Media Temple and GoDaddy

It seems like only yesterday that hosting service Media Temple was acquired by GoDaddy, a tragedy which offers vague parallels with DigitalOcean’s unfolding story. Whilst most certainly not a fan of Media Temple, I know many who swear (or swore) by its offerings. Perhaps I experienced Media Temple after it had moved into the business stage I like to call, “resting on its laurels”, aka “running out of cash”. But once it was bought out by GoDaddy – a company that carries an awful lot of negative kudos within the tech community – I knew that I would not be needing Media Temple’s services again.

Certain high profile elements of the tech industry live on mergers and acquisitions, and my goodness don’t we know it? Call me Mr Fussy but it’s made me circumspect about using any new service or product.

WhatsApp and Facebook

A couple of years ago I toyed with the idea of installing WhatsApp, Facebook’s recent $19bn acquisition. But no one over the age of thirty was using WhatsApp. Sure I could install it but it would be a bit like being the owner of the first telephone, who would I call? Facebook didn’t buy WhatsApp for its technology – Zuckerberg has previous for brazenly ripping off other companies’ ideas – but for its meta-data; all that lovely privacy-invading data connecting one person’s address book with umpteen others’.

Instagram and Facebook

Instagram is a vaguely engaging social app that allows you to tweak your photos until they look suitably old and crap. It was “fun” for about two weeks until it was bought by Facebook. As with WhatsApp, it’s not the technology that piqued Facebook’s cheque book interest but the chance to rummage around numerous address books willy-nilly.

Nest and Google

The Nest thermostat looks great, in a late noughties kind of way. It’s a very tempting product but the energy savings from spending 300 quid on a thermostat ran into negative territory for most households. It’s a good job that the economics don’t add up because Nest was acquired by Google, who basically want to line up enough mug punters to re-enact 1984 on an industrial scale.

Waze and Google

Traffic dodging app Waze was a GPS navigation system with a few innovative social features. Waze got bought by Google to further its plans for global domination.

Carpetbagging

The mergers and acquisitions cycle manifests itself differently in other industries. My first savings account was with the Britannia Building Society. It was opened for me shortly after I was born. The idiots that ran that society subsequently wrote to me to notify me that in order to prevent me carpetbagging the society that I had been a member of for 20 years, they were closing my account as it didn’t have enough money in it. I’m free to describe the management of Britannia as idiots as their ineptitude managed to drive a social business that had lasted well over 100 years into the ground and the arms of the Co-operative Bank. Face-savingly it was called a “merger”. In its turn, that merger brought the Co-operative Bank to its knees. Uniquely, and somewhat surprisingly given that the sector in which it operates is fuelled on hubris, Bolivian marching powder and booze, the very mention of the name “Co-operative Bank” now invokes imagery of vulture funds, crystal meth and rent boys.

Exceptions to the rule

There are always exceptions. Evernote and Dropbox appear to be looking at steady rather than spectacular growth. Which is pretty boring and certainly not newsworthy.

Exceptions to the exceptions to the rule

However, if ever there was a time when someone should have been taking the money and running, it was when Google offered around $5bn for daily deals outfit Groupon in 2010. Even today, everything about Groupon’s business proposition screams smoke and mirrors, with a focus on increasing perceived company value above all else. Unless, of course, you find value in getting a 50% discount on the opportunity to queue for half an hour to eat a meal that you don’t really want in a room filled with other similarly-minded cheapskates. On a Monday night.




Alastair Aitken (124 Posts)

As a contract developer and manager I’ve worked in a wide range of enterprises in a variety of countries where I’ve encountered everything from great work, awful work, bizarre work, all the way down to quasi-legal work. If you think that you recognise your own organisation within my articles then you’re undoubtedly wrong, where you work isn’t that unique.

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