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With Yammer the latest, here’s a look back at Microsoft’s high-takes investments
Microsoft yesterday announced that it is spending $1.2 billion to acquire Yammer. The company has been rolling in cash for years, and hasn’t been shy about spending it to snap up other companies it thought could augment its portfolio or gain it an advantage in fledgling technologies. Sometimes it worked out, as with Hotmail; sometimes it didn’t, as with the aptly named Danger, the handset company whose technology spawned the ill-fated Kin phone. Here is a review of Microsoft’s top 10 such acquisitions as measured by dollar value.
Microsoft’s largest acquisition, Skype is on the verge of being integrated with the company’s Lync communications platform, which actually overlaps with Skype’s VoIP, video and conferencing technology. What Lync lacks is Skype’s popularity among consumers for its free or inexpensive calling that has attracted more than 200 million users. Skype has remained a relatively independent division of Microsoft, and continues to support other vendors’ products such as Android phones, iPhones, iPads and Sony’s PlayStation Vita. Microsoft has embedded Skype in its Windows Phone 8 operating system so incoming Skype calls appear as regular phone calls and can interface with features such as call waiting and voicemail.
When Microsoft bought aQuantive it had hopes to create a Web advertising platform that would power what CEO Steve Ballmer called at the time a thriving Microsoft advertising business. It has been absorbed into Microsoft’s Advertiser and Publisher Solutions group, where it connects advertisers with Microsoft properties BING, MSN, Skype, Windows Live and Xbox LIVE. After having trouble making a profit from the Avenue A/Razorfish ad agency that was part of aQuantive, Microsoft sold it off in 2009.
Microsoft’s Visio diagramming software and intelligent drawing tools has been well integrated with other Microsoft applications such as Excel and SQL Server so it can tap data from them to create icons that fit in diagrams. The platform includes drawing tools and templates that fit many business-oriented tasks. The resulting diagrams can be used as part of presentations or posted to SharePoint where they can be viewed via browser. The plan was to make it part of Microsoft’s business productivity suite, but it never became part of the Microsoft Office bundle of applications.
The maker of ERP software NAV for midsize companies, Navison became part of Microsoft Dynamics, a set of seven ERP as well as CRM products. It was part of a buying spree in 2001 that also saw the acquisition of Great Plains Software, which also wound up as part of Microsoft Dynamics.
The purchase of Yammer will give Microsoft a way to integrate social networking into a range of its products moreso than it does already. SharePoint and Microsoft Dynamics already interoperate to some degree with Yammer, and the purchase should make that a much tighter integration. Yammer also overlaps with Microsoft Lync, the communication and collaboration platform, which could benefit from the slicker Yammer social interface that corporate users are familiar with from their private use of social networks.
Enterprise search company Fast Search & Transfer (FAST) makes a development platform for creating searchable indexes. Its products include AdMomentum for online advertising, Data Cleansing for structured data stores, ImPulse for ecommerce and Radar for business intelligence. The independently run company is developing a multimedia search engine for the European market called PHAROS. Its FAST Search Server 2010 for SharePoint tailors the search engine for the easier-to-use interface of SharePoint.
Great Plains Software’s financial management platform was already a success when Microsoft bought the company in 2001. It has since been incorporated as part of Microsoft Dynamics and is called Dynamics GP and includes among its features general ledger, accounts payable, fixed assets, cost accounting and project accounting.
This is the largest single investment among many Microsoft has made in the Japanese cable TV market. After Microsoft bought controlling shares in Titus, it bought up the largest cable operator in Japan, Jupiter. Microsoft owned 24% of the shares in the combined company, according to Directions on Microsoft. Overall, Microsoft has invested more than $8.4 billion in Japanese cable companies with the idea of accelerating the growth of Japanese broadband networks and Internet access that would promote use of Microsoft products. Since its investments, Microsoft has instead cashed in on its shares in Japan cable holdings.
Microsoft bought Danger with the idea of selling a mobile phone, which it eventually did under the name Kin, phones that had software to support social networking. The phones were sold through Verizon for two months in 2010, after which Verizon canceled their sale. Plans to sell the phones in Europe via Vodafone were also scrapped before sales even started.
Hotmail was just a year old when Microsoft bought it in 1997 as one of the earliest and most successful Web mail providers. It has grown and changed over the intervening 15 years, morphing into Windows Live Hotmail in 2007, a completely overhauled version of the service. The upgrades were aimed at improving speed and greater storage. Over time the service has been integrated with other Microsoft products such as Exchange Active Sync.
Emerging Leaders 2018