INSTAGRAM WILL MAKE MONEY???
April 11, 2012 12:52 PM   Subscribe

Successful we acquisitions, do they happen?

Facebook bought Instagram. Cool, I don't care.

It did get me thinking, has there ever been a prominent, discernibly successful web-services acquisition? "Surely," I thought when I asked myself, but I can't think of any. Starting with AOL we have a massive failure, other things that come to mind as definitely bad were mySpace and Delicious. Flickr is still around, but did it actually make Yahoo! any money? Last I heard YouTube was costing Google a fortune in bandwidth and not making up for it in advertising, but they'd probably argue it improves their ecosystem, or something. And even still, all these are examples of services that were bought and then pretty much just managed, not integrated.

So anyway, can anyone point to any examples? Ideally something where a service was bought, and the core concept or technologies was actually leveraged to improve an existing product

(Please, no examples of hardware or conventional software companies please, I can think of plenty of those)
posted by Patbon to Technology (13 answers total) 1 user marked this as a favorite
 
eBay --> PayPal?
posted by roofus at 12:58 PM on April 11, 2012 [1 favorite]


I'd argue that Facebook's acquisition of FriendFeed in 2009 is largely responsible for FB becoming the data behemoth it is now.
posted by mkultra at 12:59 PM on April 11, 2012


mkultra: Interesting, any articles or something that elaborate on this idea?
posted by Patbon at 1:04 PM on April 11, 2012


I saw some stats last year that Youtube was actually profitable for Google: most of the bandwidth they're using is over (formerly) dark fiber that Google bought after the dotcom crash combined with a very aggressive push to run ads against any video that's generating real traffic has paid off for them.
posted by Oktober at 1:10 PM on April 11, 2012


Apple buying the thing they renamed to "iTunes"?
posted by XMLicious at 1:11 PM on April 11, 2012


Oops, looks like it was just an MP3 player at that point.
posted by XMLicious at 1:13 PM on April 11, 2012


Bret Taylor, one of the founders, is now the CTO of Facebook. A lot of the tech that drove FriendFeed became the basis of the FB news feed.
posted by mkultra at 1:19 PM on April 11, 2012


Microsoft bought a little web service called Hotmail.
posted by FlamingBore at 1:20 PM on April 11, 2012 [2 favorites]


Sure, there are lots, especially it we consider what the CEOs of giant tech companies consider "success", like MySpace actually yielding a net positive in NewsCorp's stock price & revenues for enough years before it was sold that it constitutes a success.

But if you just consider this from the human/consumer standpoint, there are still lots of wins:

* Yahoo bought Rocketmail & Oddpost, both of which have informed Yahoo Mail, their biggest web property.
* Microsoft's buy of Hotmail, as mentioned, was very valuable.
* Amazon is fantastic at this; Zappos, IMDB, Half.com and others all attest to their skill in not ruining acquisitions.
* Ebay's buy of PayPal is probably the gold standard from a corporate standpoint, though the benefit to users is debatable.
* Google's buy of YouTube is certainly profitable and arguably great for users. Their buy of Blogger hasn't ruined the product, though it stagnated, and the service remains extremely popular. Their first acquisition, Deja, evolved into Google Groups, which is still a very good product. Jotspot & Writely were acquisitions whose evolution into Google Docs was very well-managed, too.
* Twitter's buy of Summize made Twittter search possible, and that's now core to how many people use the service.

Those are just some major ones from big companies. Though it's at the OS level, Android has been wildly successful for Google and started as an acquisition and has thrived in the web era. iTunes, as noted above (along with Lala) have also been very valuable for Apple.

To be clear, successful small team acquisitions are the exception, not the rule. But they're also not that uncommon.
posted by anildash at 1:41 PM on April 11, 2012 [5 favorites]


Google Docs is largely cobbled together out of acquisitions. They don't monetize it directly, that I know of, but it's important strategically for competing with Microsoft Office. Similar deal with Google Photos/Picasa Web Albums.
posted by phoenixy at 1:45 PM on April 11, 2012


Amazon is full of startups that were acquired for talent or technology and then successfully integrated into the larger company:

* IMDB - Huge movies community
* DPReview - the best consumer photography review / community site
* Audible - digital audio books
* Joyo - Amazon's presence in China
* MobiPocket - the core format for Kindle books
* BookSurge - on demand book printing
* CustomFlix - on demand CD/DVD manufacturing (combined with BookSurge to form CreateSpace)

Plus lots of tiny little companies that no one has ever heard of that Amazon just bought before they got big.
posted by b1tr0t at 1:46 PM on April 11, 2012 [1 favorite]


Applied Semantics was acquired by Google and turned into Adsense and Adwords. I'd say thats pretty successful :)

Also Doubleclick acquisition by Google, although that was already a profitable business on its own.
posted by wildcrdj at 2:32 PM on April 11, 2012


Google Docs is a core part of Google Apps for Business (education, government, etc) and definitely makes some money.
posted by idb at 7:47 PM on April 11, 2012


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