In general, big tech companies have a head start when it comes to acquiring a business. We think in particular of the flair of Mark Zuckerberg and Facebook who were able to spot the very good vein that constituted the Instagram and WhatsApp applications. But it can also happen to GAFAM to be wrong. In this article, we will come back to three emblematic failures.
Google et Motorola Mobility
When Google bought Motorola Mobility in 2012 for $12.5 billion, it seemed like a relative bargain. The idea of the Mountain View firm is in particular to get hold of numerous patents to beat the competition and prepare its own mobile.
Certainly, the operation is successful, and the Tech giant has since marketed its range of smartphones. But on the accounting level, on the other hand, it looks very much like a resounding failure. In 2014, Google finally preferred to stop the costs and decided to resell Motorola Mobility to the Chinese company Lenovo for 2.91 million dollars. Even being bad at math, we spot this net loss of 10 billion.
Microsoft and Nokia
In 2013, the former CEO of Microsoft, Steve Ballmer was very proud to announce the acquisition of Nokia for 5.44 billion euros. He points out as follows: “It’s a bold bet for the future, a win-win partnership for the employees, shareholders and consumers of both companies”.
The Microsoft Lumia that will come next certainly have nothing to be ashamed of the competition, but they are struggling to convince the public because developers tend to be sulky and only develop relatively few applications. Therefore, phones running on iOS and Android are much more attractive.
Finally, the new boss of Microsoft, Satya Nadella ends up coming to terms with the facts. He decides to dismiss 7800 employees of the mobile branch of the company. Nokia was finally sold to HMD Global at the end of 2016 and that’s the end of a great story.
Amazon and Fabric.com
Last October, we learned of the immediate closure of Fabric.com, an online fabric store that supplied hundreds of local businesses and artisans. It all started well in 2008 when Amazon got its hands on the platform.
However, over time, some fabric companies have complained of late payments. According to our colleagues from The Vergethe Tech giant would not have managed this very particular market correctly, in particular by not appointing the right people to run this service.
