HP buys Palm
The History
The one-time king of PDAs, Palm re-entered the smartphone market in 2009 with webOS, an operating system that looked equipped to take on iOS and Android. We raved about it following a hands-on at its Mobile World Congress unveiling. And then it launched… There followed a damp squib of a marketing campaign and a dribble of mediocre handsets – including the stupefying poorly-named “Palm Pixi” WebOS was undoubtedly very good, but if nobody was buying the handsets, who cared?
The Buyout
HP had spent years with the choice of any OS it liked, so long as it was Windows. WebOS offered an alternative. When Palm asked for bidders to bail it out in April 2010, after a couple of years of middling-to-poor phone sales, HP dug deep and threw £1.2 billion at the cause. They finally had their own OS, leaping free of the shackles of Microsoft.
What happened next?
For about a year, not a lot, at least as far as consumers were concerned. HP helped Palm put out a few more fairly poor mobile phones and webOS started appearing on HP’s eStation printers. The first real fruit of the union arrived with the HP TouchPad, which was a great showcase for Palm’s interface. Even if there were doubts that it could worry the iPad, the TouchPad was widely praised and raised expectations for future HP tablets. Palm is dead; long live webOS.
Microsoft buys Skype
The History
Skype launched in 2003 and quickly became the world’s VoIP platform of choice. However, while dominant in the home video chat market, Skype made a $352.2 million loss in 2009, though it did manage a $20.6 million profit in 2010. Most of its users don’t pay for the service.
The Buyout
$8.5 billion. That’s what Microsoft handed over to take the Skype reins in May this year. Why so much dosh for such a low-profit company? Firstly, Microsoft no doubt saw greatly increased potential for video chat in the home, thanks to the sudden appearance of a camera in the living rooms of all the millions who bought the Kinect. It may have felt that its Windows Phone 7 operating system needed a version of Apple’s Face Time if it were to compete. Finally, the fact that Facebook was also said to be sniffing around Skype may have spurred Microsoft to dive in.
What happened next?
It’s too early to say. The application of Skype’s technology and the scope of its reach can only continue to grow over the next year or so, but Microsoft has rung any changes as yet. Skype will almost certainly feature in the next wave of WP7 handsets, as well as providing the bones for Xbox Kinect’s video calling. It’ll also begin to earn Microsoft a pretty penny when it’s licensed for use on smart TVs from the likes of LG.
EA buys Pop Cap
The History
Pop Cap was born in 2000 and for many years was probably best known Bejeweled, which has been ported to every device short of your kitchen kettle, garnering 50 million downloads along the way. Peggle was another big hit, but it was the award-winning PC, Mac, iPhone and Android smash Plants vs. Zombies that really hit the spot, though, amassing 150 million downloads worldwide, and spawning its own range of stylish apparel and march.
The Buyout
A huge force in the home gaming market for nearly four decades, EA is keen to expand its mobile portfolio with an emphasis on casual and social gaming. So keen, in fact, that it splurged, depending on who you believe, somewhere between $650 million and $1.3 billion to bring Pop Cap on board.
What happened next?
According to releases from EA and Pop Cap, the deal will allow the latter to continue in its full capacity with the same creative staff as before. The only difference is that much of the profit will now end up in EA’s back pocket – and hey, you can recoup somewhere between $650 million and $1.3 billion in no time, right? Above all, the buyout underlined the importance of the mobile, casual gaming market, and sent valuations of rival mobile gaming über-force Rovio (Angry Birds) sky-high, or at least it did before the Dow Jones started to plummet in August.
Google buys YouTube
The History
YouTube was launched by three former PayPal employees in 2005 off the back of an initial $11.5 million investment. Its rise to success – social, if not financial – was incredibly quick. Just a year after launch, the site was recording 65,000 video uploads daily. It was this near vertical climb in popularity and market dominance that put YouTube on the radar of one of the world’s most influential companies.
The Buyout
With its own video channel struggling, Google went for the obvious solution and swallowed its most promising rival. Then-CEO Eric Schmidt said at the time of the deal that YouTube “complements Google’s mission to organize the world’s information and make it universally accessible and useful.” Hence, it dropped $1.65 billion in Google shares to snap YouTube up, despite its non-profit-making nature.
What happened next?
The two companies continue to run as separate entities. You won’t find any noticeable Google branding on YouTube. The video hosting service has gone from strength to strength, now sucking 48 hours of new video on to the web every minute. It’s the third most popular destination on the web, behind Facebook and its parent company’s search site. Word is, with increased advertising revenues, it may even be turning a profit by now, although Google has never specifically said so.