welcome to show seven of hip mojo i’m
your host ashcan carbon solution and I’m
seat see more and this week we’re going
to be talking about mergers and
acquisitions specifically in the tech
industry and why is that well because
the soap opera at AOL TechCrunch
continues but instead of talking about
that yet again we figured we’d expand
and talk broadly about what makes M&A
deals work and what makes M&A deals fail
so so um about five years ago you wrote
an article about this kelso freeze and
you pick what you thought at the time
where we’re ten of the best merger and
acquisitions in the tech space this
internet and online media specifically
Marshall to impact but yep right and
well it’s been five years that’s an
eternity in in the tech industry but
let’s go back and take a look at it and
see how it’s still holding up first
let’s start with number time all right a
quantum acquires Razorfish yeah so a
razorfish was a poster child in the.com
world one of the first digital agencies
it obviously hit turbulence after
the.com and as that crashed the reason
why i put this deal was because a
quantum sold just a few years after
about Razorfish for 160 million its soul
itself for six billion to microsoft now
Microsoft admittedly was more interested
in the Atlas ad-serving software suite
but still this was the deal that helped
a quantum grow get a lot of interest six
billion dollars a lot of money would
this deal still be in there in the top
ten list maybe I just see a lot of deals
have happened in the past five years I
would eclipse this one all right and
speaking of Microsoft that brings us to
number nine when microsoft acquired
hotmail that’s correct so a 97 yahoo
made its own acquisition of an email
company and the next year 98 hotmail was
acquired for four hundred million
dollars by microsoft you could argue
that 400 million is a hell of a lot of
money and it is but I mean four hundred
million was nothing to Microsoft and it
basically gave Microsoft the first viral
app every time you sent out an email at
the bottom it said sign up to hotmail so
that’s sort of where the whole idea of
things going viral came about would this
still be on the list I mean four hundred
million is a lot and you know
potentially hotmail accounts are not
that active anymore no I think we all
have them but no one signs into them
that’s true but it still gave them this
massive position an email 350 million
accounts is still more than the amount
of AOL yahoo and g
counts out there so I would still put it
but maybe at number 10 all right um
number eight was when ask jeeves
acquired interactive search holdings
yeah so I mean at the time this was 2004
Google was not even public yet right so
if investors wanted to play the search
market Ask Jeeves and info space or one
of the only few options what Ask Jeeves
did is they used about 340 million
dollars to buy one of the top 30
properties out there and gave itself
critical mass and then a few years later
after Google came around and just was
dominating an eating market share and
search it’s this deal that helped Ask
Jeeves cell to cell itself to
interactive Corp and Barry Diller for
1.8 billion would I put this still on
the list probably not but at the same
time you pay 340 million to buy
something you financial engineering
yourself to sell yourself for 1.8
billion that’s not bad at all but this
probably wouldn’t make this list if we
did the list today because there’s been
so many other bigger more important
deals and speaking of bigger ones this
brings us to number seven I think this
is still relevant it’s when ebay bought
paypal yeah without a doubt I think had
ebay not paid a whopping 1.5 billion for
paypal this would almost be number one
if ebay is still a premier forget
relevant a money printing company 15
years after being found it’s because of
PayPal PayPal is dominant they make
almost as much money if not more as the
decor auction business so this would
definitely be top ten and we had at
number 75 years after this might even be
higher ranked and number six AOL bought
advertising calm for a nice pretty penny
yeah shockingly in june two thousand
four AOL managed to convince the money
people at the company to spend 435
million on advertising calm what makes
this really shocking is that AOL and
time warner had merged and evaporated
about a hundred billion dollars of
market values so somehow they had the
wisdom to go ahead with this deal and
this actually was done in like the
nuclear winter of the online era so it
assured back the prominence of Internet
start-ups it assured the golden era of
ad networks and this is what led then I
think for blue lithium to exit and a
quantum to exit and right media which
you know more of an ad exchange etc but
this
I would still put this in the top 10
almost for symbolic purposes it was like
a turning point in online coming back
next all right number five I don’t even
remember this is way before my time
yahoo acquiring Inc Tomy I don’t even
know what ain’t told me you’re not that
young buddy so Inc tony was one of the
first companies that build search
technology and a lot of the different
search companies out there actually were
powered by Inc Tomi so Terry simo comes
on as CEO of Yahoo and he realizes oh my
god we’re basically a directory our
search is powered by google which made
help make google what it was so
basically what this gave yahoo was the
search technology which was half of the
puzzle the other half was the next deal
basically right number for yahoo buying
overture which they don’t even own any
more yeah so they don’t own overture
overture they paid a much higher price
they had paid 235 million dollars Franco
me but then they paid 1.6 billion
dollars for overture right so overture
initially known as goto.com founded by
Bill Gross go to was the paid listings
basically you know if you’re searching
for Madrid you got listings of ads and
madrid hotels airfare i mean i put these
at five and four which one really is
more powerful it’s almost the end to the
yang you can only leverage overture if
you have inked oh me and Tony becomes a
worthwhile piece of the puzzle if you
can monetize it from overture we’ll see
which one of these neither both makes
the list when we update it but
definitely you got to give credit to
yahoo late to the game they might have
paid a lot but they you know brought the
pieces together to play in search and
speaking of you know having a solid
search prod product and a solid search
advertising platform that brings us to
number three with Google acquiring
Springs yeah so a lot of people when i
did this article not bash me a lot of
people actually said spot-on even fred
wilson legendary investor a lot of other
very smart people executives investors
and you know analysts and journalists
where i do think i probably made a bit
of a slip-up is i chose the spring steel
which was a unit of prime media at the
time primedia also owned about calm
springs was really the distribution of
those listings that you see google has
now everywhere around the web i think in
hindsight and i’m probably giving away
here the neck
list the deal that Google made that was
probably a lot more influential was
buying applied semantics applied
semantics gave them the technology in
Adsense which is basically what allows
them to scan a page and say oh this is a
page on Madrid so we’re going to run ads
on Madrid travel Spain paella or when I
took elements of their algorithm
essentially exactly Springs was
important in that it was a distribution
and reach but it was probably applied
semantics that was the more critical
piece and number two they’re not a tech
giant but it’s made your list the New
York Times buys abocom yeah so this
one’s a bit tricky in 2005 you have to
bear in mind when they paid 400 million
for about.com they basically bought an
asset that primedia had paid a lot more
the reason why I put it on the list is
because this really for a while did give
New York Times an opportunity to get
more into digital without you know
becoming basically like a Content farm
and just publishing any random video any
random article just to boost the content
that they had in the traffic so the
reason why this made it on the list was
because it allowed the New York Times to
preserve that great editorial
journalistic integrity etc etc but gave
them an asset in the about.com franchise
that could just pump up more pump out
more articles get more traffic now
obviously about calm has been attacked
by demand media which sort of out about
it about.com if that’s any normal weight
of speaking but but so I’m not sure if
this deal would still make it on the
list but I mean it did help New York
Times get like a second engine to grow
online and preserve the great New York
Times franchise which takes us to number
one number one just shows you why
hindsight is so hilarious and why I have
a thick skin to actually do this today
but I her gone and i think everyone sees
us coming it’s when news corp acquired
myspace okay so i did this in 2006 it
was in november of 2006 a month after
the YouTube deal at the time I like the
YouTube deal but I thought it was way
too premature to talk about Google
buying YouTube I mean a month into a
deal you can comment so I purposely in
the intro said we’re excluding that
which I was very bullish on and remained
bullish today but in 2006 this was
before myspace got facebook basically
myspace and News Corp had basically
become a top 10 player because of this
acquisition when news corp paid 580
million
for myspace parent intermix why this
became the number one is really one
reason and one reason only and in fact I
got 900 million reasons for you google
agreed to pay news corp’s fox
interactive media unit nine hundred
million dollars so that immediately
recoup the investment for Rupert Murdoch
now of course myspace could have been a
great thing that kept on growing the
next MTV could have been the Facebook
could have been the next Google it
wasn’t so we’re going to take a short
break this is as good of a segue as I
need to come back and discuss one why
myspace failed but also take a step back
and just talk about why do M&A deals
sometimes fall apart we’ll be right back
your host ashcan carbon solution and I’m
seat see more and this week we’re going
to be talking about mergers and
acquisitions specifically in the tech
industry and why is that well because
the soap opera at AOL TechCrunch
continues but instead of talking about
that yet again we figured we’d expand
and talk broadly about what makes M&A
deals work and what makes M&A deals fail
so so um about five years ago you wrote
an article about this kelso freeze and
you pick what you thought at the time
where we’re ten of the best merger and
acquisitions in the tech space this
internet and online media specifically
Marshall to impact but yep right and
well it’s been five years that’s an
eternity in in the tech industry but
let’s go back and take a look at it and
see how it’s still holding up first
let’s start with number time all right a
quantum acquires Razorfish yeah so a
razorfish was a poster child in the.com
world one of the first digital agencies
it obviously hit turbulence after
the.com and as that crashed the reason
why i put this deal was because a
quantum sold just a few years after
about Razorfish for 160 million its soul
itself for six billion to microsoft now
Microsoft admittedly was more interested
in the Atlas ad-serving software suite
but still this was the deal that helped
a quantum grow get a lot of interest six
billion dollars a lot of money would
this deal still be in there in the top
ten list maybe I just see a lot of deals
have happened in the past five years I
would eclipse this one all right and
speaking of Microsoft that brings us to
number nine when microsoft acquired
hotmail that’s correct so a 97 yahoo
made its own acquisition of an email
company and the next year 98 hotmail was
acquired for four hundred million
dollars by microsoft you could argue
that 400 million is a hell of a lot of
money and it is but I mean four hundred
million was nothing to Microsoft and it
basically gave Microsoft the first viral
app every time you sent out an email at
the bottom it said sign up to hotmail so
that’s sort of where the whole idea of
things going viral came about would this
still be on the list I mean four hundred
million is a lot and you know
potentially hotmail accounts are not
that active anymore no I think we all
have them but no one signs into them
that’s true but it still gave them this
massive position an email 350 million
accounts is still more than the amount
of AOL yahoo and g
counts out there so I would still put it
but maybe at number 10 all right um
number eight was when ask jeeves
acquired interactive search holdings
yeah so I mean at the time this was 2004
Google was not even public yet right so
if investors wanted to play the search
market Ask Jeeves and info space or one
of the only few options what Ask Jeeves
did is they used about 340 million
dollars to buy one of the top 30
properties out there and gave itself
critical mass and then a few years later
after Google came around and just was
dominating an eating market share and
search it’s this deal that helped Ask
Jeeves cell to cell itself to
interactive Corp and Barry Diller for
1.8 billion would I put this still on
the list probably not but at the same
time you pay 340 million to buy
something you financial engineering
yourself to sell yourself for 1.8
billion that’s not bad at all but this
probably wouldn’t make this list if we
did the list today because there’s been
so many other bigger more important
deals and speaking of bigger ones this
brings us to number seven I think this
is still relevant it’s when ebay bought
paypal yeah without a doubt I think had
ebay not paid a whopping 1.5 billion for
paypal this would almost be number one
if ebay is still a premier forget
relevant a money printing company 15
years after being found it’s because of
PayPal PayPal is dominant they make
almost as much money if not more as the
decor auction business so this would
definitely be top ten and we had at
number 75 years after this might even be
higher ranked and number six AOL bought
advertising calm for a nice pretty penny
yeah shockingly in june two thousand
four AOL managed to convince the money
people at the company to spend 435
million on advertising calm what makes
this really shocking is that AOL and
time warner had merged and evaporated
about a hundred billion dollars of
market values so somehow they had the
wisdom to go ahead with this deal and
this actually was done in like the
nuclear winter of the online era so it
assured back the prominence of Internet
start-ups it assured the golden era of
ad networks and this is what led then I
think for blue lithium to exit and a
quantum to exit and right media which
you know more of an ad exchange etc but
this
I would still put this in the top 10
almost for symbolic purposes it was like
a turning point in online coming back
next all right number five I don’t even
remember this is way before my time
yahoo acquiring Inc Tomy I don’t even
know what ain’t told me you’re not that
young buddy so Inc tony was one of the
first companies that build search
technology and a lot of the different
search companies out there actually were
powered by Inc Tomi so Terry simo comes
on as CEO of Yahoo and he realizes oh my
god we’re basically a directory our
search is powered by google which made
help make google what it was so
basically what this gave yahoo was the
search technology which was half of the
puzzle the other half was the next deal
basically right number for yahoo buying
overture which they don’t even own any
more yeah so they don’t own overture
overture they paid a much higher price
they had paid 235 million dollars Franco
me but then they paid 1.6 billion
dollars for overture right so overture
initially known as goto.com founded by
Bill Gross go to was the paid listings
basically you know if you’re searching
for Madrid you got listings of ads and
madrid hotels airfare i mean i put these
at five and four which one really is
more powerful it’s almost the end to the
yang you can only leverage overture if
you have inked oh me and Tony becomes a
worthwhile piece of the puzzle if you
can monetize it from overture we’ll see
which one of these neither both makes
the list when we update it but
definitely you got to give credit to
yahoo late to the game they might have
paid a lot but they you know brought the
pieces together to play in search and
speaking of you know having a solid
search prod product and a solid search
advertising platform that brings us to
number three with Google acquiring
Springs yeah so a lot of people when i
did this article not bash me a lot of
people actually said spot-on even fred
wilson legendary investor a lot of other
very smart people executives investors
and you know analysts and journalists
where i do think i probably made a bit
of a slip-up is i chose the spring steel
which was a unit of prime media at the
time primedia also owned about calm
springs was really the distribution of
those listings that you see google has
now everywhere around the web i think in
hindsight and i’m probably giving away
here the neck
list the deal that Google made that was
probably a lot more influential was
buying applied semantics applied
semantics gave them the technology in
Adsense which is basically what allows
them to scan a page and say oh this is a
page on Madrid so we’re going to run ads
on Madrid travel Spain paella or when I
took elements of their algorithm
essentially exactly Springs was
important in that it was a distribution
and reach but it was probably applied
semantics that was the more critical
piece and number two they’re not a tech
giant but it’s made your list the New
York Times buys abocom yeah so this
one’s a bit tricky in 2005 you have to
bear in mind when they paid 400 million
for about.com they basically bought an
asset that primedia had paid a lot more
the reason why I put it on the list is
because this really for a while did give
New York Times an opportunity to get
more into digital without you know
becoming basically like a Content farm
and just publishing any random video any
random article just to boost the content
that they had in the traffic so the
reason why this made it on the list was
because it allowed the New York Times to
preserve that great editorial
journalistic integrity etc etc but gave
them an asset in the about.com franchise
that could just pump up more pump out
more articles get more traffic now
obviously about calm has been attacked
by demand media which sort of out about
it about.com if that’s any normal weight
of speaking but but so I’m not sure if
this deal would still make it on the
list but I mean it did help New York
Times get like a second engine to grow
online and preserve the great New York
Times franchise which takes us to number
one number one just shows you why
hindsight is so hilarious and why I have
a thick skin to actually do this today
but I her gone and i think everyone sees
us coming it’s when news corp acquired
myspace okay so i did this in 2006 it
was in november of 2006 a month after
the YouTube deal at the time I like the
YouTube deal but I thought it was way
too premature to talk about Google
buying YouTube I mean a month into a
deal you can comment so I purposely in
the intro said we’re excluding that
which I was very bullish on and remained
bullish today but in 2006 this was
before myspace got facebook basically
myspace and News Corp had basically
become a top 10 player because of this
acquisition when news corp paid 580
million
for myspace parent intermix why this
became the number one is really one
reason and one reason only and in fact I
got 900 million reasons for you google
agreed to pay news corp’s fox
interactive media unit nine hundred
million dollars so that immediately
recoup the investment for Rupert Murdoch
now of course myspace could have been a
great thing that kept on growing the
next MTV could have been the Facebook
could have been the next Google it
wasn’t so we’re going to take a short
break this is as good of a segue as I
need to come back and discuss one why
myspace failed but also take a step back
and just talk about why do M&A deals
sometimes fall apart we’ll be right back
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