Worst tech mergers and acquisitions: Facebook and Instagram

A corporate merger, like a marriage, can yield a whole stronger than its parts -- or it can end in utter disaster. In ZDNet's ramp up to Valentine's Day 2016, we countdown the worst corporate romances in IT history.

Corporate mergers - like marriages - can result in the whole being stronger than its parts -- or they can end in utter disaster. The IT industry has suffered its share of disastrous marriages. Here are the worst of the worst.

#15 - Facebook & Instagram

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While not anywhere near on the "WTF" scale as Zynga's or HP's acquisition blunders in the last year, the $1B acquisition of the photo sharing service by Facebook is still somewhat questionable and it remains to be seen if the merger ends up being a successful one.

On the surface it seems that Facebook entering the photo sharing space was a good idea, but whether they needed to spend a billion dollars to do something they probably could have coded in-house for far, far less money and gotten probably instantaneous market share on is another matter entirely.

Years after the acquisition, Instagram is still a separate app download from the main Facebook app on both the iOS and Android platform, and the sharing of the photos on user timelines is anything but seamless, so the integration of the company's assets have been questionable.

But code integration isn't the worst of this merger's problems. Facebook has in recent years lost its API integration with Twitter, which has enraged many of Instagram's core user base that actively uses both services. Kerfuffles over Instagram's terms of service and photo usage rights by Facebook haven't helped the company's image either.

#14 - Zynga & OMGPOP

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You'd think that OMGPOP would have other assets worth $200 million besides a single game that had questionable monetization value to Zynga.

In what is probably the most "WTF" of all mergers and acquisitions that took place in 2012, none made less sense than Zynga's $200 million cash purchase of OMGPOP, the publisher of DrawSomething!, a popular game for iOS and Android devices.

You'd think that OMGPOP would have other assets worth $200 million besides a single game that had questionable monetization value to Zynga, but no, they did not.

With this splurge purchase, and having to cut about five percent of its workforce as a result, this has to be one of the worst possible outcomes for a startup. It's also unlikely the company was able to retain its DrawSomething! userbase as a result of the acquisition, so the value of the purchase is entirely questionable.

#13 - MySpace & News Corp.

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In 2005, MySpace was purchased by Rupert Murdoch's News Corporation for $580M.

Founded in 2003, Myspace was once the most popular social networking web site in the world, and in June of 2006, the company surpassed even Google as the most visited website in the United States. In August of 2006, the site had reached over 100 million account activations.

In 2005, the company was purchased by Rupert Murdoch's News Corporation for $580M. When the company was at its peak in 2007, Myspace had a market capitalization of about $12B.

In 2008, the company's fortunes began to go into a steep decline. Rather than improving their social networking experience the company chose to go with a "portal-style" strategy for building its audience around music and entertainment instead. Additional modifications to the site in the hopes of increasing the company's advertisement revenue also made it unwieldy and slow to use.

To make matters worse, the company's main rival, Facebook, was eclipsing it in traffic with its clean and efficient site design, increased number of users and was building a platform where 3rd-party developers could plug into an API to build new applications for it. By contrast, Myspace was doing all of its development in-house.

In June 29, 2011, Myspace was sold to Specific Media and pop star Justin Timberlake for approximately $35 million, a far cry from the $12B valuation it had only four years previous.

Next up, even worse: #12 and #11

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