March 10, 2015

Uber acquisition demonstrates M&A solutions for independence

On this blog, we recently discussed Uber's acquisition of deCarta, a digital mapping service. One of the most interesting aspects of that deal is how it could decrease the ride service's dependence on Google Maps. If speculation that Google could enter the ride share marketplace comes to pass, in the coming years the Silicon Valley-based tech giant might launch a credible competitor to Uber. This possibility makes it all the more critical for Uber to find a way to stand on its own two feet with navigation functionality. 

The tech sphere is constantly expanding and adapting, and large corporations are continuously diversifying business models. For that reason, today's partner or service provider could be tomorrow's competitor. Native programming is essential to independence, reducing the influence of companies with competing interests. 

However, not every company has the in-house resources to develop, say, a brand new mapping and navigation platform. This is where mergers and acquisitions come into play. Instead of spending years developing a new system, the deCarta acquisition allows Uber to access the progress and expertise deCarta has already established. 

"Although deCarta isn't as well known as Google Maps, its technology is extensively used by consumers," explains Michael Liedtke of Bloomberg. "The OnStar system built into cars made by General Motors Co. relies on deCarta, as do smartphone makers Samsung Electronics and BlackBerry Inc. In its early years, Google Maps even tapped into deCarta's technology, according to deCarta."

Functional independence allows companies to maintain autonomy in a market that's often driven by giant corporations with diverse and popular services. With the help of an M&A advisor, companies can implement an acquisition strategy that boosts their independence through tactical acquisitions.