Social media has made countless millionaires and even a few billionaires. Facebook is currently valued at almost 200 billion dollars, with some predicting it will one day be worth 1 Trillion or more. They do have over a billion users. The social network market is always growing, with new networks being founded to take advantage of this growth. It makes sense that many of these networks are acquired by larger corporations. But some social media acquisitions really don’t make much sense at all. For whatever reason some social media acquisitions are just shocking. It could be because the offer was so large or simply because no one was expecting it. Here are ten.
Yahoo Buys Tumblr
In 2013, Yahoo purchased Tumblr for 1.1 billion dollars. This was an incredibly shocking acquisition as almost no one would have valued Tumblr as being even close to a billion dollars. It just didn’t make sense. Tumblr wasn’t growing fast enough for that valuation, nor did they have enough active users. The biggest problem is that Tumblr has very little revenue potential. It’s not exactly linkedin. Yahoo has a history of making terrible acquisitions but this one might be the worst. Tumblr is essentially a write off for them. I was hoping it was the first of many social media acquisitions to go wrong for them. They threw 1.1 billion dollars down the drain. They purchased Tumblr in an attempt to revitalize interest in their stock.
News Corporation Buys Myspace
Myspace was once the dominant social network; every young person was on it. But Myspace learned the hard way that social networks can also decline. At it’s peak it was valued at 12 billion dollars and even had the option of acquiring Facebook. But in 2011 News Corporation purchased Myspace for just 35 million dollars. This just goes to show how far a social media website can fall. This was only 4 years after it’s 12 billion valuation so I think it’s fair to call the acquisition shocking. It’s thought that most people stopped using Myspace because they found Facebook to be better. Myspace was recently passed to another owner by accident, as the acquired the parent company of Myspace.
Twitter Buys Periscope
Periscope is a live-streaming app which grew rapidly in 2015 and shows signs of continuing growth this year. Before the social network even launched, Twitter purchased it for an undisclosed amount. It’s thought to have been between 70 and 100 million dollars, which is pretty good for an app that hadn’t even been launched yet. Periscope has been used to broadcast several monumental events in real time. The recent Turkey coup saw a lot of periscope usage. The reason this acquisition is shocking is because Twitter actually made a good decision for once.
Facebook Buys Instagram
In 2012, Facebook purchased Instagram for 1 billion dollars. At the time, people thought it was a crazy deal. This was before several billion dollar social network acquisitions were a common occurrence. But Mark Zuckerberg saw something in Instagram that others didn’t. Today, Instagram is the fastest growing major social network, worth way more than 1 billion dollars. When Gary Vaynerchuck stated that Facebook stole Instagram at only one billion, people thought he was crazy also. So in hindsight it seems like a straightforward deal; it was pretty shocking at the time. Only 300 million of the deal was in cash, with the rest in Facebook stock – so it’s an even bigger deal than it first sounds.
Microsoft Buys Yammer
In 2012 Microsoft purchased Yammer, a social network used by people within the same organizations to communicate with their coworkers. It’s an interesting niche which Microsoft though could easily be integrated with their business model. It was a 1.2 billion dollar deal, which was a big jump considering Yammer had just 8 million users. But the type of users were influential as they tended to be within large corporations. They attempted to integrate the Yammer technology to al Microsoft business accounts, which might have created something similar to Linkedin. I think the fact that Microsoft recently acquired Linkedin shows that there Yammer plans failed.
Disney Buys Instafluence
Disney has bought a few social networks recently, one of which is for children. Last year, they purchased Instafluence, which connects influencers with big Vine or Instagram followers with people who can help them earn money through sponsorship’s and things like that. It’s unknown how much Disney paid for the network but it clearly shows how they are adapting for new media industries. They already purchased Maker Studios for around 600 million dollars, the division which purchased Instafluence.
Google Buys Waze
Google is currently the second most valuable corporation on Earth. It’s difficult to maintain a position like that without makes some acquisitions. In 2013 they purchased a social network called Waze. Waze is an app which has a community-based system of mapping out areas. The whole thing was crowd sourced and had a significant community who worked together to develop it. The purchase of Waze shined a light on the maps war, which has google and Apple competing to see who can grab the biggest market share of mapping applications of smartphones. The deal was worth just over 960 million dollars.
Michael Birch Buys Bebo
Michael Birch and his wife founded the social networking website Bebo in 2005. It quickly gained popularity with young teenagers and was eventually sold to AOL for a massive 850 million dollars in 2008. This was AOL’s opportunity to get into the social network business. But there was a problem. The young teenagers grew up and moved onto other social networks, with Bebo simply being left behind. Bebo declined quicker than most other social networks, with the company having to declare bankruptcy. The BBC even described it as one of the worst deal of the dot com era. But the real shocking acquisition came a while later. Three years ago, the original founders of Bebo bought their network back for just 1 million dollars. It’s now operated by them.
Facebook Buys Oculus
Despite Oculus not having anything to do with social media, i’m including this as it was purchased by a social media website. I think all purchased Facebook make are social media acquisitions. It’s shocking because no one expected it. A social media website purchasing a virtual reality website is new. What’s more is that Facebook paid over 2 billion dollars. This caused Facebook stock to fall as people didn’t think it was a good idea. But investors are now realizing that VR is going to be a multi-billion dollar industry. Last year it was announced that Microsoft and Facebook are to work together with the goal of creating the ultimate VR gaming experience.
Microsoft Buys LinkedIn
Microsoft is in the process of purchasing LinkedIn for 26.2 billion dollars. It’s the 5th biggest business deal ever made and all the payment is in cash, not stock. I think this news shocked everyone. We knew Linkedin had a lot of potential but not 26 billion dollars of potential. Each LinkedIn share is being bought at the cost of 196 dollars by Microsoft. Bill Gates recently gave an interview in which he said that LinkedIn can eventually be bigger than Facebook. I personally doubt this but I think it could end up making more money than Facebook.