Yahoo spent more than anyone on acquisitions in 2013, but why?

May 7, 2014
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Yahoo spent more than anyone on acquisitions in 2013, but why?

Yahoo, who trail behind contemporaries like Google, have topped the list of large tech companies making acquisitions in 2013. According to a study by PrivCo, Yahoo acquired more companies and spent more money than anyone else. With an upcoming investment maturing, the spending may increase, but some are wondering what Yahoo is up to.


In 2013, Yahoo acquired 22 companies, spending just over $1.2 billion. Google, who we pay much more attention to, spent just shy of $1.2 billion in snapping up 19 entities. Autodesk was a surprising third place, while Facebook landed in the number four spot. Apple rounded out the top five, which is listed according to how many businesses were acquired, not money spent.

Yahoo didn’t even crack the top 50 in 2012, either. Marissa Mayer took over in July of that year, though, and quickly started a shopping spree. Her largest pick-up, Tumblr, happened just shy of her one year mark, and at $1.1 billion, made up a huge chunk of the spending in 2013.

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Save Tumblr, that gave Yahoo about $100 million to spend on 21 companies. Speaking to Venture Beat, PrivCo CEO Sam Hamadeh said “It’s hard to see a rhyme or reason here. The concern is that when you’re buying a company every two weeks … are you integrating these companies as part of a grand plan? And despite all these acquisitions, Yahoo revenues are pretty flat.”

The natural assumption is that all this spending was actually an “aqcuihire” spree, in which Yahoo snapped up talent via purchasing a company. That could be the case, but at TechCrunch Disrupt today, Mayer was complimentary of just how talented her team was when she got there. Does Yahoo have big things from smart people in the pipeline, or was Mayer just being glib about Yahoo’s employees?

There is also the pending Alibaba IPO for Yahoo, who is a major stakeholder in the Chinese e-commerce giant. When that happens, Mayer and Yahoo will have a lot more cash on hand to continue shopping, which according to Hamadeh is a concern. That may not be the case, though.

If the companies Yahoo did acquire — even if they were “aqcuihires” — fit into a larger goal for Yahoo, they may use some funds via the Alibaba IPO to seed development of their internal programs. There has to be rhyme and reason for Yahoo to have picked up these companies, even if it was just to keep talent from the likes of Google or Facebook. In the continued push for Yahoo to be more mobile and contextual, we should look forward to a Yahoo stacked with both talent and money in 2014.

Via: Venture Beat


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