The world of tech acquisitions is one of the most fascinating landscapes in business. While acquisitions often seem like strategic moves to gain market share or tech expertise, some have transformed entire industries. In this second part of our deep dive into the greatest tech acquisitions of all time, we’ll explore how some of the biggest names in Silicon Valley changed the course of their futures with smart, bold purchases.
In part 2 of this blog (you can find part 1 here) Let’s look at the top acquisitions that not only shifted power in their respective Categories but also created entirely new ones.
5) Google Acquires Android
- Purchase price: $50 million
- Return: $112 billion
In 2005, Google acquired Android for a mere $50 million. At the time, Android was an 8-person startup, and it was in the very early stages of a mobile revolution. The acquisition came just two weeks after the Android team had been rejected by Samsung—a move they’d later regret. By open sourcing the operating system, Google turned Android into a dominant force, powering smartphones across multiple manufacturers and mobile carriers worldwide.
This was more than just about buying technology. It was about creating a new Category in the mobile ecosystem. Although Android now competes with Apple’s iOS, Google became the de facto leader in mobile OS with Android, capturing the majority of the market share. Through Android, Google has not only built an entire mobile ecosystem, but it’s also reaped the rewards of mobile advertising revenue.
Category leader? Absolutely – Android has firmly cemented Google’s position at the top of the mobile OS duopoly.
4) Apple Acquires NeXT
- Purchase price: $50 million
- Return: $126 billion
In 1997, Apple acquired NeXT for $427 million, which included both cash and Apple stock. At the heart of the acquisition was NeXT’s Unix-based operating system, NeXTSTEP, which would become the foundation of macOS X. This deal also marked the return of Steve Jobs to Apple, a move that would prove crucial in shaping the company’s future.
While the technology itself didn’t necessarily create a new Category, the acquisition allowed Apple to recover Jobs, who would go on to lead the company into an era of innovation that included the iPod, iPhone, and iPad. In a way, this was a Category leadership move—not for the technology, but for the person who embodied innovation.
Category leader? Not initially by market share, but ultimately yes, as Jobs became the Category king of innovation.
3) Google Acquires YouTube
- Purchase price: $1.65 billion
- Return: $165 billion
When Google acquired YouTube in 2006, the video-sharing platform had only been around for two years. Despite its youth, YouTube had already created an entirely new Category – video sharing – and was the undisputed leader in it. Today, YouTube is a massive part of Google’s parent company, Alphabet, contributing a significant chunk of revenue.
In 2006, YouTube had 25 million videos uploaded, and today, that number is in the tens of billions. YouTube has grown from a simple video-sharing site to a major player in both entertainment and advertising, with over 50 million paying music subscribers.
Category leader? You bet. YouTube wasn’t just a bet on digital video; it was an acquisition that allowed Google to dominate the video-sharing category and transform how we consume content.
2) Meta Platforms (Facebook) Acquires Instagram
- Purchase price: $1 billion
- Return: $174.5 billion
In 2012, Instagram was a relatively small 13-person startup with 30 million users. Fast forward to 2020, and it boasts over 2 billion active monthly users. By acquiring Instagram, Meta (formerly Facebook) not only captured a photo-sharing app that would evolve into a social media powerhouse, but it also solidified its dominance in the social media space, ahead of rivals like Twitter.
Instagram created a whole new category—”photo blogging”—and carved out a space for itself among smartphone users who sought a more visual-centric social experience. With Instagram, Meta stayed ahead of competitors and ensured its place as a leader in both social media and visual content.
Category leader? Yes, Instagram created its own category, and Meta made sure it stayed at the top.
1) Google Acquires DoubleClick
- Purchase price: $3.1 billion
- Return: $182 billion
When Google acquired DoubleClick in 2007, it was a pivotal moment in the evolution of digital advertising. DoubleClick was the leading ad tech company at the time, and this acquisition gave Google the tools it needed to dominate the online advertising world.
Through DoubleClick, Google not only gained access to cutting-edge ad tech, but it also secured a dominant position in the digital ad space, controlling the ad buying and publishing platforms. While DoubleClick’s technology remains foundational, it’s the broader strategic advantage it gave Google—particularly in shaping the future of digital advertising—that has led to the biggest return on investment of any acquisition in this list.
Category leader? Without a doubt. DoubleClick solidified Google’s position as the king of online advertising and set the stage for its future acquisitions in the space.
What Have We Learned?
If there’s one thing these acquisitions teach us, it’s that the companies that manage to acquire existing Category leaders often experience the biggest returns. Google, in particular, has made some of the most successful and far-reaching acquisitions, with four of its purchases appearing in the top ten. From Android and YouTube to DoubleClick, Google has proven that its ability to identify and leverage Category leaders is a significant driver of its success.
Moreover, we see how timing is everything. Acquiring companies at the right moment – when their potential is just beginning to be realized – can unlock tremendous value in the future. While many of these deals seemed risky at the time, their returns have been nothing short of extraordinary.
So, next time you hear about a tech acquisition, think about what it could mean for the future. Because, as we’ve seen, some of the greatest tech acquisitions of all time didn’t just reshape companies – they reshaped entire industries.
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