According to investment banking firm Jegi, the volume of technology-related mergers and acquisitions that took place in 2017 hit record-breaking levels. The third quarter of 2017 alone saw $160 billion dollars worth of deals go through, with over 2500 businesses purchased and sold during the period.
Although some industry insiders have drawn parallels between today’s investment-friendly tech environment and the market conditions that surrounded the industry during the dot-com boom at the turn of the millennium, this current trend of buyouts seems to be very different in nature.
At that time, corporations were seemingly willing to pony up cash for any upwardly mobile Silicon Valley start-up, regardless of profitability and track record. In comparison, present day buyers are far more cognizant of how to leverage technologies for their business needs. Now, organizations across all sectors make use of a wide variety of technologies, including mobile platforms, AI, robotics and analytics tools to drive transformations and streamline processes; and that constant search for innovation only looks set to continue in the coming years.
It’s clear to everyone from established industry juggernauts to enterprising newcomers that neglecting tech investments just isn’t a choice any longer. With that in mind, taking a look at some of the biggest tech moves over the past year should give us a much better idea about which corporations are setting themselves up best for the future.
Apple Acquires Shazam
When news started filtering in earlier this year about Apple’s interest in purchasing music recognition app Shazam, the move was hailed as a masterstroke by many in the industry. In recent years, Apple’s music services have been somewhat overshadowed by close competitor Spotify. In September, when Spotify announced it had achieved 65 million subscribers on its streaming platform compared to Apple’s 30 million, the gulf between the two companies was illustrated even more clearly.
With the $400 million dollar acquisition of Shazam in December, Apple has made it clear that it plans to step up efforts to upend this dynamic. Through Shazam, Apple now has access to a pool of over 1 billion additional users, many of whom are already well acquainted with purchasing music on partnered services through the music detection app. Interestingly enough, before the acquisition, Spotify was amongst the partnered companies using Shazam to generate referrals towards its own offerings.
Alongside an expanded user base, Shazam’s integration brings additional tech capabilities to Apple. For one, the app offers a sophisticated audio recognition system that could bring Apple’s devices on par with advanced voice-controlled speakers like Google Home and Amazon Echo. Shazam also offers a variety of image recognition features which could easily be combined with Apple’s own high-quality digital cameras to produce several augmented reality tools on next-gen mobile phones and tablets from the company.
Ford Acquires Argo AI
2017 has been something of a breakthrough year for self-driving technologies. From Google’s Waymo and GM’s Cruise Automation to Uber and Tesla, over the past year, major players in both the automotive sector and Silicon Valley have been in a fierce race to create the first viable solution for autonomous travel. With the $1 billion acquisition of previously unheralded AI startup Argo in February, Ford has added its considerable resources to the fray.
Although Ford already has a long-running robotics unit, the purchase of Argo seems to have been made with a view towards optimizing the software and computer platform for its in-house virtual driving systems. This would include the planning and implementation for a range of sensors which include: cameras, radars, light detectors, and positional mapping features. The ultimate aim seems to be the development of a “full stack” system that would allow Ford’s fleet of self-driving vehicles to know where they are and how they should move in relation to changing environments in real-time.
At the helm of the new partnership are former Uber and Waymo engineering heads Peter Rander and Bryan Salesky, two heavyweight names in the burgeoning field of self-driving technology.
Verizon Acquires Yahoo
In June, one of the most iconic brands in internet history saw its independent existence come to an abrupt end, as Verizon announced the $4.5 billion acquisition of Yahoo. With the move, Verizon brought together the combined digital media assets of two massive online entities in AOL and Yahoo into a consolidated subsidiary simply known as Oath.
According to the industry insiders, the primary motive for this spate of acquisitions is Verizon’s increasing desire to extend its presence into the world of online mobile and video advertising. With this move, the telecommunications giant is putting itself into direct competition with established market leaders in the field like Google and Facebook. Indeed, the impressive portfolio of programmatic ad-buying and targeting tools available to AOL was one of the main reasons cited for the purchase of that conglomerate back in 2015. Yahoo’s range of digital media companies, along with its stockpile of advertising technologies should work to enhance these capabilities even further.
With a wide-ranging array of digital content providers including The Huffington Post, engadget, and Yahoo Finance now under the Verizon umbrella, along with a wealth of targeted user data, look for Verizon to make a huge splash in the world of digital advertising in 2018.
Amazon Acquires Whole Foods
Amazon’s eye watering $14.7 billion dollar purchase of high-end grocery chain Whole Foods sent shockwaves throughout the tech world when it was announced this past August; with the deal representing one of the biggest acquisitions in retail history.
As news came in, retail industry insiders immediately started sounding alarm bells about what the merger could mean for the future of local grocers and food-delivery businesses across the US. In particular, experts pointed towards the wealth of new data Amazon would now be able to access; data that included grocery purchasing patterns, product preferences, and consumer behaviors pulled from Whole Food’s massive base of affluent customers throughout the country. In addition, the ecommerce giant now can integrate Whole Food’s range of proprietary products into its own growing line of Amazon branded goods.
As Amazon redoubles its efforts towards vertical integration by incorporating a variety of fashion lines and manufacturers under its umbrella, this deal represents simply another step in the company’s quest to create the most efficient order fulfillment system in the world.
This year is only going to be better! Cheers to a successful 2018!
by Bobby J Davidson
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