Bangalore: Microsoft has acquired more than 146 companies starting from its first acquisition, of Forethought on June 29, 1987. Forethought developed a presentation program that would later be known as Microsoft PowerPoint.
Microsoft purchased more than ten companies a year, between 2005 and 2008, and it acquired 18 firms in 2006, the most in a single year, including Onfolio, Lionhead Studios, Massive Incorporated, ProClarity, Winternals Software, and Colloquis. Microsoft has made six acquisitions worth over one billion dollars: Skype (2011), aQuantive (2007), Fast Search & Transfer (2008), Navision (2002), Visio Corporation (2000), and Yammer (2012).
Read on to know about 8 Microsoft acquisitions and their biggest hits and misses as compiled by CNET.
Visio
Purchased for: $1.375 billion
Date: January 7, 2000
Visio’s principal product was diagramming application software. It was acquired by Microsoft and is now in a division of that company, which continues to develop the application under the name Microsoft Visio. Microsoft acquired Visio for $1.4 billion stock swap, its largest acquisition to date. Its diagram application was first designed specifically for Windows 95, under the Microsoft Office umbrella.
Though Visio is still a lesser known Office application, it's the company's preeminent flowchart software. It receives updates with every Office refresh and is still sold separately. It is now a part of Office 365, and has sales in the hundreds of millions of dollars a year.
Navision
Purchased for: $1.45 billion
Date: July 11, 2002
After purchasing Great Plains Software, which developed mid-market business accounting software, Microsoft bought Navision A/S, which made the similar product, but had higher penetration in European markets. The two acquisitions are to solidify Microsoft’s business management software.
Both were bundled into Microsoft Dynamics, with Navision and Great Plains becoming two of its four software arms in the sector. While Microsoft did gain a valuable collection of offerings in the quickly growing enterprise software market, it had hedged close to $3 billion on its potential to snatch the lead away from competitors like SAP, Salesforce, and Oracle. Ultimately, it failed.
Rare
Purchased for: $375 million
Date: September 24, 2002
Rare was a British video game developer. During its early years, Rare primarily concentrated on Nintendo Entertainment System games, creating successful titles such as Wizards & Warriors, Battletoads, and R.C. Pro-Am. The company achieved critical acclaim and commercial success with their subsequent releases, which included Donkey Kong Country, Killer Instinct, GoldenEye 007, Banjo-Kazooie, Perfect Dark, Conker's Bad Fur Day, and Star Fox Adventures.
In September 24, 2002, the company was wholly purchased by Microsoft and has since focused on developing games exclusively for Microsoft video game consoles. Rare was a somewhat puzzling purchase by Microsoft, which at the time had just made the risky foray into console gaming with the original Xbox the year prior.
After some of Rare's sequels to its legacy brands failed to move units, it began to look like another useless multi-hundred-million dollar video game expenditure. To the rescue was the Kinect motion controller in 2010. Rare was repurposed to focus on the Kinect, developing the commercially successful Kinect Sports.
Tellme Networks
Purchased for: $800 million
Date: March 14, 2007
Tellme Networks specializes in telephone-based applications. It established an information number, operating by voice prompts and speech-recognition software, which provided time-of-day announcements, weather forecasts, brief news and sports summaries, business searches, stock market quotations, driving directions, and similar amenities.
Soon after Microsoft bought the company, it saw the entire concept of Tellme become somewhat irrelevant with the rise of the mobile Web, all despite the company's original business model being aimed at the kind of voice-assisted mobile search that we now get with Siri and Google Now.
aQuantive
Purchased for: $6.3 billion
Date: August 13, 2007
aQuantive was a digital marketing service and technology company. According to Advertising Age magazine, in 2005 it ranked 14th in terms of revenue among advertising agencies worldwide. Microsoft acquired the company for $6.3 billion, the largest acquisition in Microsoft's history until its 2011 purchase of Skype. aQuantive became part of Microsoft's newly-created Advertiser and Publisher Solutions (APS) Group.
On July 2, 2012, Microsoft announced that it would take a $6.2 billion writedown, mostly related to the 2007 acquisition of aQuantive, nearly the entire cost of the original acquisition.
Fast Search & Transfer
Purchased for: $1.2 billion
Date: April 25, 2008
Fast Search & Transfer was a Norwegian focused on data search technologies. Microsoft acquired FAST, which is now known as Microsoft Development Center Norway. FAST offered an enterprise search product, FAST ESP. ESP is a service-oriented architecture development platform which is geared towards production searchable indexes. Fast also offered a number of search-derivative applications, focused on specific search use cases, including publishing, market intelligence and mobile search.
Despite the lack of competitors, Microsoft saw apparent value in the market in 2008 when it purchased Fast Search & Transfer for $1.2 billion. While the Norwegian firm was charged with accounting fraud and raided by the police after the Microsoft acquisition for improperly reported revenue years earlier, the company's technology has bolstered the success of Microsoft's SharePoint collaboration platform.
Skype
Purchased for: $8.5 billion
Date: May 10, 2011
On 10 May 2011, Microsoft announced it had agreed to acquire Skype for $8.5 billion. Skype was already nearly synonymous with consumer video chatting when Microsoft scooped it up in the largest acquisition in the company's history. This marked a 300 percent increase in value for the company in the three years since the eBay write-down in October 2007. This constitutes Microsoft's largest ever acquisition.
It was announced that Skype will become a division within Microsoft. The price Microsoft agreed to pay for the company is 32 times Skype's operating profits. According to the Financial Times this raises fears of a new tech bubble.
In October 2012, one year on from the Skype acquisition closing, the newly formed Skype Division took responsibility for Microsoft's other VoIP and Unified Communications product Microsoft Lync .
Yammer
Purchased for: $1.2 billion
Date: June 25, 2012
Yammer, is a freemium enterprise social network service that was launched in 2008 and sold to Microsoft in 2012. It is used for private communication within organizations and is an example of enterprise social software. Microsoft was apparently looking for a social network element to add to its overflowing enterprise portfolio when it picked up Yammer. It came in as an addition to Microsoft's Dynamics, Sharepoint, and Office 365 suites and was meant to be a way to drive up adoption of other Microsoft services.
Though Yammer's user base has grown from 5 to 8 million and sales of paid networks, business model is still antithetical to that of Microsoft's core model, which is sell wide-reaching access to services and products through contracts.
Then Microsoft started selling Yammer for free and then tried to sell companies on other features. Ballmer praised freemium concept, saying "Yammer is a great adoption model and we want to pour more content into it." But it's unclear whether Ballmer's vision will come to fruition, especially given his early exit.
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