Judge a man by his questions rather than his answers
|
|
|
The INQUIRER Top 5 Overpriced Acquisitions
DID YOU EVER buy something then see it cheaper somewhere else when it was too late and you got that low-down, sinking, queasy feeling in the bottom of your stomach? It’s too early to say whether Steve Ballmer is going to get that feeling about Facebook, or whether he’ll just laugh and write it off to experience. Actually, I think I know he never gets that queasy feeling.
But it’s easy to pay too much, especially at a time when the cash is being splashed all around so you feel like that fad wad is just Monopoly money and the whole world is just a big fat oyster.
We all spend too much sometimes. You pay thousands of pounds on a ring and all it buys you is a lifetime of pain. You buy a sweet looking car and the mechanic spends more time with it than you do. The house that was going to be home, sweet home is full of rot.
So let’s be sympathetic here when we think of times when the price was high, too high, and count down The INQUIRER’s Top 5 Overpriced Acquisitions.
5. Novell-WordPerfect. Always itching for a fight with Bill Gates, Novell boss Ray Noorda couldn’t resist picking up his Utah neighbour WordPerfect for close on $1bn in the early 1990s. Despite proximity, the marriage didn’t last for long and most of the damaged goods were passed onto Corel for a fraction of the money.
4. AOL-Netscape. Netscape was the Google of its time, a golden stock with a bright future, but by the time AOL had got round to buying it, the best days were gone. That didn’t stop the company that had a free sign-up disk on every magazine paying out several billion dollars for the pleasure of owning a company with a browser soon to be rendered roadkill.
3. Sun-Cobalt Networks. In 2001, Scott McNealy wanted the hottest server appliance company on the block but couldn’t make much sense of what he paid $2bn for, and ended up mothballing the firm's products just a few years later. Perhaps coincidentally, Sun later got legal with Azul Systems, a company started by former Cobalt boss Stephen DeWitt.
2. HP-Compaq. Carly Fiorina thought this was a good idea but then she would have done, wouldn’t she? There was a ton of overlap in x86 where Compaq was getting kicked by Dell, and HP didn’t want Compaq’s Unix business. What that left was an army of service people and a ton of other people who lost their jobs because of function duplication. The executives who cut the deal were richly rewarded anyhow.
1. Lotus-Samna. At about $65m, this early 1990s buyout seems like chicken feed now but was a big deal at the time and helped start a domino effect in PC software acquisitions. Lotus wanted to catch up with Microsoft on Windows so the Ami Pro wordprocessor was seen as attractive. Later, Lotus followed up by buying the Approach database and Threadz Orgainiser but clearly couldn’t spell the word ‘value’ and it proceeded to take a righteous and unnecessarily prolonged beating at the hands of Microsoft Office. µ
Share this:
Share
Nah, HDDVD promotions group paying about 150 million in incentives to get paramount exclusive and getting tranformers exclusive, for it only to flop against 2 blu ray catalog titles. lot of money to still lose.
How about Intel's huge move into buying communications companies in early 2000's? Such as Level One (2.2b), Dialogic (800m), Giga (1.2b)? Over 4b wasted on just 3 companies. All of them never made any money for Intel, most were sliced and diced and finally sold off at great lost.

I know this is backwards, but AOL buying Time Warner with massively overvalued stock and then promptly becoming a massive drag on the combined company has to be the most ridiculous acquisition of the last decade.
I think this list is a little stupid!

Sure the deals mentioned do look stupid today (some more than others). But at the time many of them made good sense and after all nobody knows the future.
I could be wrong...but with regard to "that sinking feeling", I'm thinking that 5 million consumers spending 200 bickies too much equals a cool billion in over expenditure. Sure it's collective, but 5 million collective "sinking feelings" could sink the Quenn Mary.
What about AMD buying ATI?!?
AMD buying ATI?????
I thought that one would be on the list.Combined worth $20.0bn, net worth today $6.3bn.....
Number 1 overpriced acquisition in my book is the At Home (@Home) broadband service's payment of over $6 BILLION for the Excite web site. Six billion dollars for a WEB PAGE?
Oh of course they called it a "web portal", but that didn't give it any more real value.
Now in retrospect I wonder what kind of pollution 'footprint' AOL left with all those pointless free AOL CD's
They must have given out at least 500 million of the things.

As the other person said, the Ebay purchase of Skype is, without doubt, the most overpriced acquisition ever and for all time. Skype and Ebay have NOTHING in common, the $2.6 billion purchase price is far above the annual Skype sales, and the Skype assets are worth about $2 million total. Ebay just wrote off $1.4 billion of the purchase price and covered it up with a lot of GAAP/non-GAAP nonsense. The rest will soon follow...
bluemountain?
Let's not forget AMD & ATI Damit!
Actually HP-Compaq was not that bad, at least Compaq name still live on. I think it is well priced,

On the other hand, Skype / Ebay was really overpriced, I am expected someone crazy to aquire Facebook, lolz, 15b+++, a price that might see overpriced in 2007
Citrix for Xen Source at $500M.

Come on. Put $500M in bonds, and you have $25M a year. That will pay for 100 engineers annually off the interest alone. Xen Source is nowhere near that big. And only had $8M in revenue last year.

I nominate it dumbest acquisition of the decade.


How can you miss what was far and away the biggest takeover bust of all time was the AOL Time Warner deal. This deal outvalued all the others mention in this article by a factor of 50. $182 bilion. How can you miss it? What type of research was done for this waste of time article?
The bighest fiasco in recent history was the buying of CNN/TIME by AOL. AOL on it's own is now obsolete no wonder it reverted back to cnn/time which has greater brand value.
I totally cringed at the headline for the article and crossed my fingers that Cobalt wasn't on the list. Doh!

Still, the Sun-Cobalt deal worked out ok for most of the Cobalt employees, disheartening as said mothballing was.
ebay shelling out $2.6bn for skype trumps them all in my opinion...
Yahoo buys broadcast.com for $5.04 billion, didn't do anything for the bottom line at Yahoo. 

Next week: "Top 5 Dumbest Partnerships"
I nominate Yahoo-Google as #1.
Hi Marty - synergies are very important. I am sure you agree!
it hurt like it never should have to find out hp was absorbing compaq. i wonder what would've come of it if apple and compaq had joined...
You missed an early big one: Borland buying Ashton Tate. Can't remember how much, but it was a disaster. [Surely catastrophe? Ed.]