The 10 Stupidest Tech Company Blunders
Some of the biggest high-tech deals never happened. Some of the most promising products and services never came to be. Why? Because the people and companies involved didn't realize what they were letting slip through their fingers, or they simply couldn't foresee what would happen afterward.
Mon, August 17, 2009
PC World — Some of the biggest high-tech deals never happened. Some of the most promising products and services never came to be. Why? Because the people and companies involved didn't realize what they were letting slip through their fingers, or they simply couldn't foresee what would happen afterward.
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Change just a few circumstances, and there might not be an Apple or a Microsoft today. Yahoo might be the king of the search hill, with Google lagging behind. You might be reading this on a Xerox-built computer via a CompuServe account while listening to your favorite tunes on a RealPod.
People say hindsight is 20-20. If so, our vision is acute. Here are our picks for the biggest missed opportunities in the history of technology.
1. Yahoo Loses Facebook
In 2006, Facebook was a two-year-old social network that most people thought of as a digital playground for Ivy League brats. In the world of social networks, MySpace's 100 million members totally swamped Facebook's 8 million. So when Yahoo offered to buy Mark Zuckerberg's baby for a cool $1 billion--nearly twice what Rupert Murdoch had spent for MySpace in 2005--people said, "Take the money and run, Mark." In fact, the then-23-year-old and Yahoo shook hands on a deal in June 2006.
Then Yahoo posted some bad financials, and its stock dropped 22 percent overnight. Yahoo's CEO at the time, Terry Semel, reacted by cutting the purchase offer to $800 million. Zuckerberg balked. Two months later Semel re-upped the offer to $1 billion, but by then it was too late.
Today, Facebook boasts some 250 million registered users and is worth roughly $5 to $10 billion, depending on who's counting. Three years and two CEOs later, Yahoo is still struggling to survive.
2. Real Networks Punts on the iPod
People think Steve Jobs invented the iPod. He didn't, of course. Jobs merely said yes to engineer Tony Fadell after the folks at Real Networks rejected Fadell's idea for a new kind of music player in the fall of 2000. (Fadell's former employer Philips also turned him down.)
By then MP3 players had been around for years, but Fadell's concept was slightly different: smaller, sleeker, and focused on a content-delivery system that would give music lovers an easy way to fill up their "pods." (Jobs is famous for driving the design of the iPod.)
Today that content-delivery system is known as iTunes, and Apple controls some 80 percent of the digital music market. Fadell worked at, and eventually ran, Apple's iPod division until November 2008. Real Networks is still a player in the streaming-media world, but its revenues are a fraction of what Apple makes from iTunes alone. (Photo: Courtesy of Apple)
