Tech Partnerships: Hits, Misses and Too Soon to Tell

This week, Microsoft surprised many by announcing that it will be investing in a newly-formed Barnes & Noble division that will include the Nook e-reader and the company’s college businesses.

Price: $300 million for 17.6 percent of the new Barnes & Noble digital division.

TOO SOON TO TELL: It’s very early, but the potential for a win-win is high. The companies need each other to compete against Apple and Amazon in the popular tablet and e-reader space. Microsoft gives B&N money, global reach and software. B&N gives Microsoft established content, hardware and a retail presence.

In late 1996, the down-and-out Apple purchased a struggling Steve Jobs-founded company called NeXT, mainly for its operating system and influential developer following. The price ended up being a steal.

Price: $429 million and 1.5 million shares of Apple stock

A HIT:  In 1997 Apple was in deep financial trouble. It needed Steve Jobs back and needed fresh new technology. NeXT gave the company both. The NeXTSTEP OS, which used object-oriented programming and graphical user interfaces, became the foundation for a refresh of the Mac OS, which debuted as Mac OS X 10.0 in 2001. It has been rather successful since then.

Sprint paid big in 2005 for a majority stake in fellow telecom company Nextel to boost its user base and revenues and create a wireless powerhouse. At least that was the idea.

Price: $36 billion

A MISS: Both companies thought they would be able to quickly merge customers and catch up to Verizon and AT&T. But cultural clashes and incompatible wireless technologies made that impossible. Nextel executives began leaving soon after the merger. Throughout 2008 and 2009 there were billion dollar losses, thousands of layoffs and the company’s stock plummeted.

In August 2011, Google announced it was acquiring Motorola Mobility, the mobile devices division of Motorola. The buy will allow Google to own its smartphone hardware and also claim Motorola’s many patents.

Price: $12.5 billion

TOO SOON TO TELL: The acquisition has been approved by the U.S. DOJ and the EU so it’s definitely going to happen. On one hand, Motorola’s patents will fortify Google in its Android patent battles with Microsoft, Oracle and Apple. But Motorola’s actual mobile devices have not been selling well and face increasingly stiff competition from Apple, Samsung and HTC.

This notorious 2000 merger was meant to create a perfect union between old media (Time Warner) and the Internet (um, AOL?). It’s considered the worst merger of all time.

Price: $164 billion

A BIG MISS: The two companies always seemed out of sync. By 2002, AOL Time Warner reported an astonishing $99 billion loss. The intervening years have seen massive job losses, dramatic executive departures and a free-falling stock price. In 2009, Time Warner finally set AOL free as an independent company. Today, the combined values of the companies is about one-seventh of their worth in 2000.

Online auction giant eBay bought an Internet telephony upstart called Skype in 2005 hoping that online buyers would prefer VoIP and video calls over e-mail. Wrong!

Price: $2.6 billion

A MISS: E-mail is good enough for online buyers and sellers. Nobody on eBay, it turns out, wants to talk. This was a tough and expensive lesson for eBay. After four unfulfilling years eBay sold Skype at a loss to private investors for $1.9 billion.

After getting bounced around from eBay to private investors, Skype was picked up by Microsoft in May of 2011 for a cool $8.5 billion. Microsoft hopes to integrate Skype into a variety of its products such as Lync, Windows Phone, Outlook and Xbox.

Price: $8.5 billion

TOO SOON TO TELL: Microsoft has gained both US and European regulatory approval for its Skype acquisition, but the company has been mum on how it plans to incorporate Skype voice and video features into the Microsoft portfolio. And many believe Microsoft overpaid. Nevertheless, Skype should be a game-changer for Microsoft if integrated well.

In October of 2006, Google bought the very young but very popular online video site YouTube to expand Google’s Internet and advertising footprint.

Price: $1.65 billion in stock

A HIT: Although Google was initially criticized for this acquisition because YouTube had no clear revenue plans, the deal has served Google well. It gave Google another ad revenue stream, it prevented YouTube from becoming a search engine competitor and it is putting Google in a good position for the rise of Internet connected TVs.

Adobe nabbed Web metrics leader Omniture in 2009 to make it easier for businesses to gauge the value of content – be it video, Web pages or mobile and social media content – from creation to measurement to monetization.

Price $1.8 billion

A HIT: This merger hasn’t completely found its footing, but by uniting Omniture’s data analytics technology with Adobe’s content creation software, the deal gives advertisers, media companies and retailers more insight into the metrics of their digital assets and how to make money from those assets.

In 2005 when Rupert Murdoch’s News Corp. bought MySpace owner Intermix Media, it seemed like a great idea. MySpace was a hot social media site that could drive traffic to all the sites in Murdoch’s media empire.

Price: $580 million

A MISS: Myspace basically stopped innovating once it became just another property in the Murdoch domain. Meanwhile, Facebook exploded as the only social media site that mattered. In 2011, News Corp. sold off Myspace for just $35 million to ad company Specific Media.

Hewlett-Packard acquired floundering smartphone maker Palm in April 2010 as a way to give HP some leverage in the fast-growing mobile devices market.

Price: $1.2 billion

A MISS: The idea was to expand HP’s mobile footprint but that was curtailed almost immediately by the dismal sales of the HP Touchpad tablet running Palm’s WebOS operating system. At the same time, HP was too late to compete in the consumer smartphone market. As for an HP smartphone tailored for the enterprise, the consumerization of IT movement killed that idea. At least HP got Palm’s patents.

In May 2010, Google completed its acquisition of mobile advertising company AdMob, pushing search on smartphones and providing a better ad platform for Android.

Price: $750 million in stock

A HIT: AdMob was one of the first companies to serve ads in mobile apps so Google was wise to gobble it up when it did. Many cried monopoly, but when Apple made a similar purchase of mobile ad firm, Quattro, regulators calmed down. In any case, AdMob has done well by Google, as Android’s smartphone market share is now an impressive 50 percent.

Oracle grabbed Sun Microsystems in 2009, making Oracle a hardware company and giving it ownership of Sun’s programming language, Java.

Price: $7.4 billion

A HIT: Well, barely a hit. The acquisition gave Sun new life and direction, even if Sun hardware is now just a means to sell Oracle databases, middleware and apps. But even though Oracle saved Sun from certain death it has not been able to grow Sun’s hardware business.

After announcing last August that it would spin off its PC business, Hewlett-Packard acquired data analytics software company Autonomy to focus on the higher-profit enterprise software, services and server markets.

Price: $10.3 billion

TOO SOON TO TELL: This acquisition came at an awkward time for HP when it was adjusting its business model and switching CEOs. But soon after Meg Whitman replaced Leo Apotheker last September, she announced she was committed to the Autonomy buy to help HP customers “manage and extract meaning” from the “the exploding growth of unstructured and structured data.”