There is a very good chance that you are reading this on a phone, or a laptop made by Apple, or using a browser built by Google. You’ll have scrolled through your Facebook feed today for sure, looking at posts from friends and consuming news and entertainment news that way. The big tech companies are huge, they control a massive percentage of our daily lives and the way that we act online. How have they grown to be all consuming and powerful? Through acquisition. Amazon, Apple, Facebook, and Google have acquired hundreds of companies over the years, pushing them forward with new tech and acquired knowledge that has allowed them to dominate.
All the tech companies have followed a similar path to each other, first becoming the pre-eminent force in their respective sectors, before pushing forward and growing out in all directions, adding revenue streams, taking on board expertise and knowledge, and always staying one step ahead of their competitors. Google was all about search, Amazon was a bookseller, Facebook for university connections, but look at them now and how they have evolved into many other things on top of those original business ideas.
Amazon
Amazon began life as an online bookstore and was very, very successful at that. Over the first few years it began to add different products to its listings and fast became an ‘everything store’. If you think about the world today and how easy it is to think of any product that you want, visit Amazon, click and buy, and in some cases, it will arrive the very same day, you’ll see how dominant and all-encompassing Amazon has become.
Acquisitions allowed Amazon to move beyond the boundaries of an e-commerce store. It bought Whole Foods Market and all its distribution channels and locations of retail for $13.7 billion and with one click it was suddenly a grocer with outlets across the US. When it wanted to become a central part of the ‘Internet of Things’ trend, Amazon went out and bought a load of start-ups working in the field, including Eero, a home router company. It moved into streaming, as well as the production of TV and films with Prime Video, has its own Echo smart speaker and looks to improve the smart speaker and artificial intelligence with its Alexa product. Amazon continues to grow and grow, making revenues of $386 billion in 2020.
Apple
Apple is the oldest of the companies on this list, dating back to 1976. It has grown into a massive global organisation and has a history of successful acquisitions that has ramped up incredibly since the advent of the iPhone. Apple acquired companies within the software automation space to add virtual assistants, health trackers, government projects that have been set-up for something entirely different to what they end up being under Apple’s ownership (this is how Siri came about). Apple spends billions on research and will continue to do so, but sometimes you still need to look to external sources to develop your products and services.
On top of these acquisitions aimed at making Apple stronger and to have access to the best tech data and information, it has also bought companies to increase its revenue. This has been added as a policy to ensure that profits continue to remain high despite the sales of smartphones beginning to stagnate. You can see this perfectly in how Apple acquired Beats. It immediately provided Apple with an effective way to launch into the music streaming industry and have a comparable service to rival Spotify. iTunes had begun to suffer in the years since Spotify launched, but with Apple Music, things are at more of a level playing field.
Compared with Apple, Google is still a baby, but it has become a giant tech company over a relatively short space of time through clever acquisitions. Almost every Google product that you can think of, from Google Earth to Google Docs has come about through acquisition. Google initially focused on becoming the best it could be at search, and let’s be honest, it has won that battle. Pretty much everyone ‘Google’s’ something, they don’t ‘search on the internet’ for information. That is how powerful Google has become and it has helped the company to build a powerful advertising business that generates billions each year.
Google has used this revenue wisely, investing in companies and tech that has helped drive them forward. It invested in cloud computing just as it was taking off, it acquired YouTube, which has become the biggest video platform in the world, and it has the lion’s share of the digital mapping world, whilst it continues to look to the future, investing in self-driving cars etc. Google looks at acquisition as a way of accelerating innovation and growth with a view to helping the consumer live a better life. Most of its products are free to use too, making the dominance of Google even more impressive.
Facebook is huge, we all know this. The social media platform has grown from strength to strength over the years and despite many controversies it continues to grow and have influence over the daily lives of everyone from your postman to your nan, your cousin, to your driving instructor. The acquisition history of Facebook does not have as long a list as the above big tech companies, but it does have some of the largest tech acquisitions, and those that have made a massive impact on users.
Take for instance WhatsApp. Facebook acquired the secure messaging app for £19billion in 2014. It was a price tag that shocked the world, especially financial analysts at the time, as WhatsApp only had 55 employees at the time of the acquisition and wasn’t making a profit. It did have 450 million active users though and was growing at a fast rate. Fast forward 7 years and you can see what a shrewd investment it was, as almost everyone uses WhatsApp as its messaging platform of choice. Who sends an SMS these days? In 2012, Facebook had acquired Instagram for $1billion, which means that it now owns four of the top five social media and messaging platforms: Facebook, Instagram, Facebook Messenger, and WhatsApp.
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