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Tech and start up acquisitions have been occurring at a faster rate this year than they have in the past ten years. The deals cost more and they seem to be happening all over. The most recent big news flash came from the stir around the possibility of Apple acquiring Beats Electronics. This transaction would be huge because it is the largest acquisition for the computer company since 1996 when they bought Steve Jobs’ NeXT for $429 million. The Beats Electronics acquisition makes the NeXT transaction look like peanuts because the price tag is $3.2 billion. The Apple deal goes along with many other, so called “unicorn” acquisitions in the tech industry. Over the past year Facebook bought WhatsApp and Oculus, Google bought Waze and Nest Labs, Microsoft bought Nokia, and Yahoo acquired Tumblr. This rush in acquisitions will surely change the industry and how companies operate and how investors choose to apply their money. These companies that are consuming other now have an ability to quickly grow the companies they have acquired through sales. This fact is why Google has been pushing the advertising business for much of the revenue from their acquired companies. This is simply the fastest way to make money from a recently acquired company. Because so many companies have been so successful recently with acquiring and building revenue from acquisitions, any hesitance of bringing in new product lines has essentially disappeared. Now Apple, Facebook, and Google are eagerly buying up companies that make any sense to own. This is why Apple felt comfortable buying up Beat Electronics to put the headphones in along with their existing product lines. Google buying Nest also made sense for them because of the data the company could provide and the fact that it is central in the home. It is clear these tech companies are flourishing because of their acquisitions, which means that the flood of transactions won’t stop anytime soon.
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