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Most famous and expensive software acquisitions

By Amy, Eastpoint Software on 19 Aug 16

A world where $1.65bn can prove to be a bargain. Do you know which famous acquisition this is?

We often hear about software acquisitions for huge amounts of money. Most recently, the search software Vurb is reported to be in the process of being bought by Snapchat for $110m.

Let’s look back at some of the most expensive takeovers of web and mobile apps, focusing on the most memorable names.

WhatsApp bought by Facebook for $19bn

It’s the annoying name that makes it sounds like you’re asking someone what’s up, but not quite. WhatsApp was bought by Facebook for $19bn two years ago.

An interesting article by Tech Crunch explains why this valuation was not so ludicrous. And it did seem ludicrous - at the time of the acquisition, WhatsApp wasn’t even used widely in the US.

However, Facebook had previously missed out on buying Snapchat, so felt they had to make a meaty offer for WhatsApp. It also meant they avoided Google acquiring it.

Instagram bought by Facebook for $1bn

Facebook’s other software biggie. Instagram was bought for the pocket change of $1bn, a bargain in hindsight (at the time of the acquisition in 2012 it was considered a lot for a start up). It is now valued at about $35bn by Citigroup. Eye bulge emoji.

Bitstrips bought by Snapchat for $100m

This isn’t as expensive as the others and Bitstrips is less of a household name, but the thread here is the acquisition merry-go-round, as Facebook had previously failed to buy Snapchat (they didn’t offer enough money).

Bitstrips is behind the Bitmoji cartoon characters - pre drawn templates that you can choose from to create comic strips and avatars.

Vine bought by Twitter for $30m*

I wanted to include a Twitter acquisition and this is one of the most well known, given that it’s described as a ‘vine’ when someone posts a vine-hosted mini-video, rather than just a ‘video’.

*This figure is disputed with $970m also mentioned. Stock value could account for this, though there doesn’t seem to be a definitive answer.

Waze bought by Google for $966m

We haven’t had a company gobbled up by Google yet, so here it is. Waze is a type of GPS and social sat nav. It takes data from users, who can also report crashes, traffic jams, etc.

Skype bought by eBay for $2.6bn

Companies can be acquired more than once, this time we’re chosen to highlight one of the earlier acquisitions, as Skype was eventually bought by Microsoft for $8.5bn.

Early Skype software development took place in Estonia, and Microsoft have maintained a large base there.

YouTube bought by Google for $1.65bn

Another Google acquisition, and this is one of their most famous. They practically picked YouTube up at car boot sale for $1.65bn, when you consider it is an omnipresent online fixture.

Last year it was valued at about $70bn by analysts.

Myspace bought by News Corporation for $580m

A list of spendy acquisitions wouldn’t be complete without mentioning myspace, bought for $580m and later sold (to Justin Timberlake and friends) for $35m.

But that doesn’t tell the whole story. Myspace remained popular for years following the acquisition, and its valuation kept going up.

In 2008, Facebook became a bigger force, and Myspace continued to decline.

LinkedIn bought by Microsoft for $26.2bn

Another purchase by Microsoft and an ongoing acquisition expected to complete by the end of the year. The acquisition will boost Microsoft social networking portfolio.

Viber bought by Rakuten for $900m

Viber, a messaging app similar to Skype, was acquired by Rakuten, a Japanese online retailer, in 2014. At the time, Rakuten’s chief executive said they would be unable to create such an app on their own, and it provided new communication strategies for them.