October 29, 2015

Can you believe that these tech mergers could have happened?

Here are three shocking acquisition offer stories that could have changed the course of social media.

Throughout the past few years, there have been an undisclosed number of major tech industry mergers that almost happened. If many of these mergers had taken place, the world of social media and modern-day tech would look drastically different.

One of the main players in this category is Facebook. Entrepreneur reports that many in the industry remember, especially MySpace CEO Chris DeWolfe, the famed offers from Mark Zuckerberg, co-founder and CEO of the now $274 billion company, to DeWolfe in 2005. At this time, the fledgling social media site was only a year old and Zuckerberg made a proposition to sell his company to MySpace for $75 million.

DeWolfe denied the offer. Later on, Zuckerberg tried to sell the company once again, this time for $750 million. Yet, to MySpace's modern-day chagrin, this second offer was once again turned down. Many still report that this denial led to MySpace's decline in popularity as it failed to invest heavily in the social media portion of its design and instead channeled its work into its music sharing and listening features.

Despite Zuckerberg's success, one incredibly surprising shot down acquisition proposal occurred between Zuckerberg and Snapchat co-founder and CEO Evan Spiegel. It is reported that the Snapchat team turned down Facebook's $3 billion offer in 2013. This risky moved turned out to be the right one, as now the social media platform is worth $16 billion and offers interactive features that has its users coming back for more.

Meanwhile, one of the most monumental moments in merger and acquisition history in the tech industry occurred in the early years of Facebook. Venture capitalist and entrepreneur Peter Thiel was present at the board meeting when Yahoo offered Zuckerberg, who was only 22 at the time, $1 billion for the then 2-year-old college social media website.

Thiel reported his shock when Zuckerberg turned down the offer, stating that even with Zuckerberg's 25 percent share in the company's profits, he would use the money to invest in or start another site. Instead, Zuckerberg chose to go with his instinct and invest in the platform he founded.

"Thiel told this story to make a larger point about how the most successful entrepreneurs operate," Inc. reports. "He said that the best entrepreneurs, like Zuckerberg, have a definitive view about the future (in this case, an enormous, profitable social network) and plan for it; they don't willy-nilly chase luck using statistics, probability, and iterative processes to stumble upon something, anything that flies."

Other popular companies that denied initial merger offers and later gained further success include Twitter, Yelp and DropBox. Companies who unfortunately did not achieve their desired results or were forced to accept lower merger offers years later include Groupon, Digg, Viddy and Friendster.

For companies that are looking to go through a merger or acquisition, contact one of our expert M&A advisors to guide you through the process. We are a highly successful team of merger and acquisition consultants who are dedicated to aiding tech companies maximize their financial and strategic merger or acquisition goals.