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Technology Stocks : Game Changers and Market Movers

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From: Paul H. Christiansen	11/21/2014 3:38:15 PM
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The Unicorns That Weren’t It’s been a headline-grabbing year for Internet M&A, with large-cap companies such as Apple, Facebook and Amazon.com making their biggest acquisitions in a long time, or ever. There have also been some multibillion-dollar consolidations (Zillow-Trulia, Priceline-OpenTable) as well as several high-profile spin-off announcements that could portend more deal activity next year. Overall, the value of media, information, marketing and tech mergers rose to $94 billion so far this year from $45 billion during the same period last year, according to Jordan Edmiston Group. But dealmakers should heed some cautionary tales and remember the long history of big M&A flops that once seemed like high flyers. Many recent deals—including those for so-called “unicorns” worth more than a billion dollars—will fade into oblivion just as deals often have in the past. It’s hard to pinpoint just how much money was flushed down the drain. In the above chart, The Information pulled together data on deals for which the drop in value was measurable, generally because the assets were eventually sold. Other flops essentially lost all their value: Yahoo’s $3.6 billion acquisition of web-hosting firm GeoCities in 1999 and its $5.7 billion acquisition of Internet radio site Broadcast.com. Even Walt Disney has a faded unicorn story: Between 1998 and 2000, the company paid around $1.8 billion for early Web-search portal InfoSeek and Go Network, which powered Disney content sites. Both have dissolved to nothing. The complete The Information article is available only with subscription . . . The Unicorns That Weren’t

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