July 22, 2015

Characterizing the M&A strategy of tech giants

Tech companies with the largest mergers and acquisitions presence have very specific buyer profiles.

Companies that buy startups come in a variety of shapes and sizes. However, tech companies with the largest mergers and acquisitions presence have very specific buyer profiles. Conner Forrest of Tech Republic listed the M&A strategies of 10 M&A power players in tech and assigned them corresponding nicknames to describe their approach to buying enterprise property. Their various strategies depend on their particular field, how long they've been active in the industry and what their specific long-term plans are. Leadership, especially changes in leadership, also plays a major role in how these companies approach M&A. 

Here are some of Tech Republic's findings:

The Enigma: Google 

"Google is one of the most prolific acquirers in the technology space," writes Forrest. "It has spent tens of billions of dollars and acquired more than 180 companies. On the surface, however, a consistent Google M&A strategy seems nonexistent."

Google has listed people, strategic investments for the future and relevance to the core search engine mission as three pillars of its acquisition approach. Nevertheless, its acquisition track record is scattered, but at the same time, extremely successful.

The Shepherd: Facebook 

Like a shepherd, Facebook is known to herd smaller companies toward the common goal of establishing the social network's dominance across channels. Sometimes this has involved rescuing companies that have "strayed from the herd," as Forrest says. 

The Spendthrift: Microsoft

As an early tech industry leader, Microsoft's acquisition strategy can be described as active yet somewhat aimless. In its history, Microsoft has acquired 170 companies with a multitude of missions, technologies and ideas. Nevertheless, it has been a supporter of companies like Apple and Facebook before they became viable tech giants of their own. 

Appealing to any of these companies requires a clear strategy and comprehensive knowledge of their M&A proclivities. With the guidance of an M&A advisor, your startup can pursue, negotiate and sign a satisfying M&A deal.