mergertech

"When deciding whether Google should spend millions or even billions of dollars in acquiring a new company, its chief executive, Larry Page, asks whether the acquisition passes the toothbrush test: Is it something you will use once or twice a day, and does it make your life better?" reports David Gelles of The New York Times. "The esoteric criterion shuns traditional measures of valuing a company like earnings, discounted cash flow or even sales."

Companies have a diverse set of philosophies that guide their mergers and acquisitions activity. Some seem to apply no rhyme or reason at all to the decisions they make to buy or not buy other firms. Nevertheless, when a company demonstrates as much success as Google, it stands to reason that its litmus test should be particular and a bit bold. That's why a general rule of thumb Google applies before M&A is called the "toothbrush test."

This week, it was announced that Turner Broadcasting System (TBS) will acquire a majority stake in iStreamPlanet, a streaming video tech company. The terms of the deal were not disclosed but it's not challenging to predict how TBS will leverage its purchase.

You've almost certainly heard of Publishers Clearing House, the sweepstakes direct-mail distributor that made its name before "spam" existed. PCH is the organization that videotaped citizens receiving gigantic checks for gigantic sums of money after they'd won a signature contest. Today, the model might seem a bit outdated, which perhaps explains the company's movements in tech M&A to beef up new avenues for reaching consumers in the digital age.

Merge Healthcare's technology involves an imaging management system, which will likely be combined with the cloud-based health analytics computing program IBM has devised. At present, IBM technology is capable of analyzing large volumes of data and interprets complex questions stated in natural language. As that technology evolves, more breakthroughs may be in store for health care providers who depend on accurate, comprehensive assessments. 

"Alphabet is mostly a collection of companies," wrote CEO Larry Page in a blog post. "The largest of which, of course, is Google. This newer Google is a bit slimmed down, with the companies that are pretty far afield of our main Internet products contained in Alphabet instead. What do we mean by far afield? Good examples are our health efforts: Life Sciences (that works on the glucose-sensing contact lens), and Calico (focused on longevity)."

Yesterday, Google released the surprising and pivotal news that the company will be reorganized under a larger brand, to be called Alphabet. The tech giant, whose standalone logo and brand name have been ironed into the public consciousness over many years, said it decided to make the change so it could devote more management resources to enterprises other than the search and browsing services.

Perhaps you've explored M&A to discover whether now is when your company could benefit from such a deal. Through the discovery and negotiation process, it may become evident to you that there's more growth your startup can achieve on its own. In this case, it might be better to refocus your attention on research, development and other improvements that could position your company for a better deal down the road.

"Going forward, Polyvore will still be the same Polyvore that you love, but we'll have more resources to make it even bigger & better," writes Polyvore co-founder and CEO Jess Lee. "Our mission of empowering people to feel good about their style will stay the same. We'll continue to add cool new product features and roll out new perks for top members. We've accomplished a lot on our own, but together with Yahoo we can take Polyvore to its fullest potential."

The intersection of advertising and social platforms has been long and evolving. Over the years, the primary goal for messaging services as well as other social media companies has been leveraging their wealth of engagement and usership into ad sales. However, the goal is to integrate advertising in a targeted, inconspicuous way that doesn't distract or deter users.

One of the struggles small, successful startups face when they've been acquired by larger companies is reassuring their customer bases. Customers and users want confirmation that the same excellent quality and service they've enjoyed will continue through the new business partnership.

It's a scene that could go comically awry in a movie. Just as showtime nears, your small shop proves it's not ready for primetime. Employees roll into the office late and disheveled, none of the presentation technology works and your well-rehearsed elevator pitch escapes you at the last minute. Mergers and acquisitions are full of moments that seem like defining turning points in the negotiation process, when you can either win over or put off your potential buyer. 

The company you founded has begun negotiations with a larger corporation that has an interest in acquiring your startup. After a series of phone calls and meetings, you determine a date when leadership from the corporation can visit your office to meet your team and see where the innovation happens.

On this blog, we've discussed high-profile mergers and acquisitions in the ed tech space, a burgeoning and quickly changing field of research, development and product sales. As education organizations like schools, tutoring operations and colleges become more dependent on technology for teaching and learning, a host of products and platforms have filled the market to meet their needs.

Dropbox, a service many people use to store files, announced this week that it will acquire Clementine, a company that provides communication services to enterprises. Many of Clemetine's existing services will be transitioned into Dropbox applications.

In addition to its individual usership, TechCrunch reports that 100,000 businesses have built Dropbox into their operations. As such purchasing a communications solutions provider improves the company's ability to accommodate a variety of business needs like conference calls and chat services.

Companies that buy startups come in a variety of shapes and sizes. However, tech companies with the largest mergers and acquisitions presence have very specific buyer profiles. Conner Forrest of Tech Republic listed the M&A strategies of 10 M&A power players in tech and assigned them corresponding nicknames to describe their approach to buying enterprise property.

When speculating for a merger or acquisition, it's likely that companies with high national profiles will catch your attention. The most buzzed-about mergers and acquisitions in tech happen in hotbeds like New York and Silicon Valley. However, it's likely that there are potential deal makers in your geographic region that are worth checking out, whether it's the hot new startup down the block or the established digital media company in your small city.

The terms of the deal were not disclosed, but TechCrunch reports that the acquisition entails a total rebrand of Monsoon. The firm has done work with other high-profile clients in recent years but now will serve Capital One for various strategic and branding needs.

Meredith Corporation, a publisher of women's magazines, has acquired Grocery Server to support location-based ads for food and retail brands. While Meredith Corp.'s primary focus is content creation, enterprises in the content space often need native platforms for advertisers. Following a successful partnership, the acquisition formalizes the company's relationship with Grocery Server and brings its line of advertising solutions under the Meredith Corp. umbrella.