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Nov 19

Tim O'Reilly

Tim O'Reilly

Microsoft, Google and Yahoo Acquisitions Compared

The LibraryHouse blog has a nice summary of recent acquisitions (July 2006 through June 2007) by Microsoft, Google, and Yahoo!, roughly color coded by category:

LibraryHouse graph of recent Web 2.0 acquisitions

This really ought to be updated for the second half of 07, as the acquisitions pace accelerates. In my recent talks and interviews about Web 2.0 in Germany, China, and Japan, I found myself cautioning entrepreneurs that Web 2.0 is already in the consolidation phase, where few companies are really even imagining going all the way to becoming a freestanding company, but instead looking for acquisition as their final exit. (That's why Facebook's refusal to accept acquisition was so noteworthy and so refreshing.)

It would also be really nice to do something like this, but more complete, with acquisitions by category, regardless of acquiror, ranking by size of acquisition, and taking a somewhat longer time frame. For example, consider mapping -- one of the areas we identified early on as one of the key components of the emerging internet operating system, devoting an entire conference (Where 2.0) to it -- we've seen the acquisition of Keyhole, AtLast and Sketchup by Google, Vexcel and GeoTango by Microsoft, WhereOnEarth by Yahoo, but also (and much larger) acquisitions of Navteq by Nokia, and Teleatlas by either TomTom or Garmin.

It's important to recognize that the industry goes in cycles. We have some new set of breakthroughs, insights that lead to an opening of possibilities in the market. As companies emerge from the first wave, they gradually take the light from new startups growing in their shadow. First comes an acquisition phase, but that is ultimately followed simply by failure to thrive in the shadows of the giants. The industry begins to stagnate, until it all begins again with new innovations in some area that is further afield. We obviously saw this with the IBM PC. The early 80s were a hotbed of innovation in personal computing, but by the early 90s, Microsoft was telling venture capitalists where it was safe to invest.

I think we have a few years left to run in the current cycle, but it's worth noting that the landscape is changing, and following the historical pattern of expansion followed by consolidation.

tags: acquisitions, google, libraryhouse, microsoft, yahoo  | comments: 14   | Sphere It


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Robert   [11.19.07 05:06 PM]

Amazing when you colorize and get a bird's eye view of things. Although kinda like looking at clouds and making out shapes. At a glance, I see MSFT and YHOO chasing "customer support" while GOOG is after innovation.

Darren   [11.19.07 05:34 PM]

What about grandcentral and doubleclick for google?

Dan Demouser   [11.19.07 05:44 PM]

What about Zimbra COLLABORATION Suite for Yahoo?

350 million isn't a small number.

Tim O'Reilly   [11.19.07 05:51 PM]

Darren and Dan -- these figures only go through June. Grandcentral and Zimbra happened this fall. Not sure why DoubleClick isn't on the graphic, while AQuantive, which happened later, isn't. Could be that DoubleClick still hasn't closed, due to European antitrust investigations.

DouglasW   [11.19.07 05:53 PM]

Facebook is said to have offered $85 million to acquire,a Chinese social networking site with seven million users.

Darren   [11.19.07 06:00 PM]

aha good point, I think DoubleClick is also still having problems in the states as well as over here.

I'd love to see all the big tech companies purchases for 07 to see who has bought what and what area has been hot.

David   [11.19.07 08:04 PM]

Robert - I don't get why you say Yahoo is chasing customer support? All the support ones are in Microsoft's column. And I would argue Jumpcut is more innovative than YouTube. And they bought MyBlogLog purely because they wanted to see where innovation in it's space would lead.

Andy   [11.20.07 02:50 AM]

I don't mean to be petty, but that is a godawful chart !. What did you make it with - I didn't realise you could actually find an application now that didn't anti-alias text.

Tim O'Reilly   [11.20.07 07:04 AM]

Andy --

I didn't make the chart. It's from the LibraryHouse blog. sourced directly from there.

Joe Parry   [11.20.07 07:41 AM]

You'll find a more complete history here:

Manuel   [11.20.07 02:03 PM]

Nice chart, I did not realize that Microsoft bought a company for $6 billion. Never heard of aQuantive before.

Scott Eblen   [11.20.07 03:17 PM]

Tim - thanks for the link. We'll definitely look at updating this at the end of the quarter to include the recent high profile deals.

Andy - we just used Excel for the chart. I was more interested in the data than the "look" but if you have suggestions for good applications for making these types of charts I'd be interested to hear about them.

wangxiaofei   [11.21.07 10:01 AM]

who control the media, who seems to be able leading the crowds.
Then making money, and do 20%-somethings!

Michael   [11.22.07 09:51 AM]

Robert : Only Google is after innovation?

Live Maps is by far the best mapping service ever. Have you compared Virtual Earth 3D with Google Earth? Virtual Earth beats all.

And Live Search really nails down the extras that Google doesn't do. "Houston traffic" brings up a real-time virtual map right on the results page with real-time traffic info. One of the many amazing things about Live Search.

Live Translator does a better job than Google Translator, where you can view a webpage in 2 different panes, one original, one converted. Google does a 1-mode.

So Google isn't the only one making strides into web services.

So Google is not the only one making leads into web services.

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