Love stinks: The worst mergers in the history of the technology industry
by Jason Perlow | February 11, 2012 5:46pm PST | Image 1 of 11
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Valentine's Day is here again, and love is in the air. Couples flirting, courting each other and forming relationships. And sometimes those relationships result in marriage.
In the tech world, much of the same types of things occur. And as with human relationships they also can end up in marriages -- also known as corporate mergers. Mergers can result in the two parts being stronger than the whole, or they can end in utter disaster.
Here are ten worst tech industry mergers that we've ever seen our sorry sights on. To quote the J. Geils Band in their 1980 Rock n' Roll hit, LOVE STINKS.
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"The litigation debacle went on for years, chronicled in gory detail on sites such as Groklaw."
Indeed, I think Groklaw pretty much started because of this debacle. Frankly, SCO's biggest blunder was this lawsuit. It's not worth bankrupting the company over a lawsuit.
"The Many Marriages of Palm"
Yeah, who knows what Palm was doing in its last years. Before it finally merged with HP, it went from a great company to one that released new products once in a blue moon.
Thankfully, by the time they went under smartphones became popular, and I moved myself to my iPod touch, and later iPhone. Today's smart phones have all of the PIM features the old Palm devices had.
And alas, HP was unable to save the already floundering Palm.
"Oracle & Sun"
Guess we'll find out. I was never so much interested in Sun's hardware as their software, and Java is still being actively developed.
"Total subscribers of AOL went from an estimated 30 million at the height of its popularity to less than just over 5 million in 2007, with no significant quarterly growth since 2002."
Dunno if that was the result of the merger so much as it was the result of broadband and the internet. AOL was a walled garden stuck in dialup.
"Hewlett Packard & Compaq & Digital Equipment Corporation"
Compaqs, oh I remember those - BSOD city. They crashed all the time.
"Nortel & Bay"
"After numerous efforts to restructure the company and financial mismanagement scandals over a period of about ten years, the company filed for Chapter 11 in January of 2009, and its various businesses were eventually liquidated."
And one of my relatives lost his job
. He worked for Nortel.
Indeed, I think Groklaw pretty much started because of this debacle. Frankly, SCO's biggest blunder was this lawsuit. It's not worth bankrupting the company over a lawsuit.
"The Many Marriages of Palm"
Yeah, who knows what Palm was doing in its last years. Before it finally merged with HP, it went from a great company to one that released new products once in a blue moon.
Thankfully, by the time they went under smartphones became popular, and I moved myself to my iPod touch, and later iPhone. Today's smart phones have all of the PIM features the old Palm devices had.
And alas, HP was unable to save the already floundering Palm.
"Oracle & Sun"
Guess we'll find out. I was never so much interested in Sun's hardware as their software, and Java is still being actively developed.
"Total subscribers of AOL went from an estimated 30 million at the height of its popularity to less than just over 5 million in 2007, with no significant quarterly growth since 2002."
Dunno if that was the result of the merger so much as it was the result of broadband and the internet. AOL was a walled garden stuck in dialup.
"Hewlett Packard & Compaq & Digital Equipment Corporation"
Compaqs, oh I remember those - BSOD city. They crashed all the time.
"Nortel & Bay"
"After numerous efforts to restructure the company and financial mismanagement scandals over a period of about ten years, the company filed for Chapter 11 in January of 2009, and its various businesses were eventually liquidated."
And one of my relatives lost his job
. He worked for Nortel. 
except for the KIN.
But the negative experience with the Kin still taints its reputation not only with consumers but also with critical wireless carriers such as Verizon, who as of yet has refused to commit to selling more than one model of Windows Phone or an LTE version which puts it on par with its arsenal of Android devices
The vast majority of consumers have never heard of the KIN, so how can one have negative opinion of something that they have no knowledge of?
As for Verizon, there are issues on many levels, one is theirs, and Google's heavy investment into Android, as an early counter to the iPhone, something they passed on, so one can argue they do not make the best decisions when given the chance.
I feel the lack of a push on Verizon's end in reference to WP7 is an effort to "not upset the boat" in relations to Google at the moment.
But the negative experience with the Kin still taints its reputation not only with consumers but also with critical wireless carriers such as Verizon, who as of yet has refused to commit to selling more than one model of Windows Phone or an LTE version which puts it on par with its arsenal of Android devices
The vast majority of consumers have never heard of the KIN, so how can one have negative opinion of something that they have no knowledge of?
As for Verizon, there are issues on many levels, one is theirs, and Google's heavy investment into Android, as an early counter to the iPhone, something they passed on, so one can argue they do not make the best decisions when given the chance.
I feel the lack of a push on Verizon's end in reference to WP7 is an effort to "not upset the boat" in relations to Google at the moment.
@Mister Spock
The problem is that Verizon mandated data plan on what is essentially NOT a smartphone.
KIN would have done well to compete with feature phones.
The problem is that Verizon mandated data plan on what is essentially NOT a smartphone.
KIN would have done well to compete with feature phones.
Are tech people already measuring their lives in numbers of mobile phone contracts?
You mention companies like Novel and Borland or their assets being acquired by other companies - spending huge dollar amounts to do so.
Is it because of patent portfolios that acquiring companies purchase these outdated technologies or businesses?
Is it because of patent portfolios that acquiring companies purchase these outdated technologies or businesses?
@kenosha77a Patents and legacy maintenance business.
My(Murdock)Space a perfect example of how not to do it.
Take a new technology, totally misunderstand what it is about, destroy the customer base by enforcing change without analyzing the likely effects, etc., etc.
One for the classroom of Business 101.
Take a new technology, totally misunderstand what it is about, destroy the customer base by enforcing change without analyzing the likely effects, etc., etc.
One for the classroom of Business 101.
@Agnostic_OS
Well of course, Mr Murdoch was not used to "customers" creating their "own news". His model was that his empire created it, and the "customers" consumed it. Duh. Bad move Murdoch. Perhaps he should have got the company to bribe the police a bit more... Oh wait, that wouldn't have worked on MySpace either.
Well of course, Mr Murdoch was not used to "customers" creating their "own news". His model was that his empire created it, and the "customers" consumed it. Duh. Bad move Murdoch. Perhaps he should have got the company to bribe the police a bit more... Oh wait, that wouldn't have worked on MySpace either.
It's far too early to say whether Oracle's acquisition of Sun was good or bad. If the alternative for Sun was insolvency, then Sun shareholders probably came out ahead. The same may be true of Sun employees, not all of whom were laid off. Of course, we'll never know for certain what would have happened to Sun if Oracle hadn't acquired it.
From the Oracle side, if the Java litigation is successful, Sun will have turned out to be rather a bargain for Oracle shareholders, no matter how badly the hardware business does. It will also serve as a warning to other firms that trying to use someone else's IP without paying for it can actually cost more in the long run than than paying for it up front. This is good for Oracle, the IT sector generally and all industries that rely on IP protection. It will be bad for Google, of course, but it was Google management's choice to gamble on not paying Sun for the Java IP Google allegedly used anyway.
From the Oracle side, if the Java litigation is successful, Sun will have turned out to be rather a bargain for Oracle shareholders, no matter how badly the hardware business does. It will also serve as a warning to other firms that trying to use someone else's IP without paying for it can actually cost more in the long run than than paying for it up front. This is good for Oracle, the IT sector generally and all industries that rely on IP protection. It will be bad for Google, of course, but it was Google management's choice to gamble on not paying Sun for the Java IP Google allegedly used anyway.
What the hell does this mean?
It means Oracle has done a poor job of using Sun's assets to build value for its stakeholders. As Sun was on the decline, any company that would acquire it would be considered successful in stewardship of integrating the company only if Sun-derived business improved. It has not.
Don't forget tech services businesses. The biggest fail? Whittman-Hart + USWeb/CKS = 10,000 employee $1B revenue services company in early 2000's. Life span? One year.
marchFIRST was the name
I would have to say if not number one, it should be pretty high up there and that's Sprint and Nextel. Two completely different technologies and offer nothing of benefit to the company or consumer. This transaction has put Sprint on deaths door (they've got the layoffs to show it too) for the last several years when AT&T and Verizon are flourishing.
Well...AOL/Time Warner took several Billionaires, and made Millionaires out of them...at best.
ST Ericsson is pretty close to making this list! If it was a publicly traded company then the share holders would be clamoring for a sale
Love the ill-fated pairings. But a nit-pick on history regarding dBase... Admittedly ancient history here.
dBase was never a hierarchical database. Rather it maintained a file-and-index catalog of tables which could be "related" and used in a "relational" manner using the dBase language. Eventually they added multiple-key indices, but it was never hierarchical. Foxbase and then FoxPro cloned both the architecture and the language, adding enhancements. The main enhancement they added was reliability. Ashton-Tate's memory model and software engineering left much to be desired. Fox moved it into the 20th century even before Microsoft lifted the 640kB memory barrier. Eventually MS bought Fox, rebranding it as Visual FoxPro, although retaining most of the old product. All the clones -- including Clipper, a compiled version -- shared two key features: support for the dBase file structure and support for most of the dBase language.
Eventually most xBASE vendors tried adding a SQL interface. But that didn't make any of the products any more or less relational. It only gave them a new language. And yet another software layer and its added bugs and latency.
dBase was never a hierarchical database. Rather it maintained a file-and-index catalog of tables which could be "related" and used in a "relational" manner using the dBase language. Eventually they added multiple-key indices, but it was never hierarchical. Foxbase and then FoxPro cloned both the architecture and the language, adding enhancements. The main enhancement they added was reliability. Ashton-Tate's memory model and software engineering left much to be desired. Fox moved it into the 20th century even before Microsoft lifted the 640kB memory barrier. Eventually MS bought Fox, rebranding it as Visual FoxPro, although retaining most of the old product. All the clones -- including Clipper, a compiled version -- shared two key features: support for the dBase file structure and support for most of the dBase language.
Eventually most xBASE vendors tried adding a SQL interface. But that didn't make any of the products any more or less relational. It only gave them a new language. And yet another software layer and its added bugs and latency.
To be accurate, Caldera did not acquire the Santa Cruz Operation. Caldera bought SCO's UNIX distributorship, and the rights to the SCO name. The Santa Cruz Operation remained in Santa Cruz and changed its name to Tarantella, which was the name of its then-leading product. Tarantella was ultimately acquired by Sun Microsystems, before Sun was acquired by Oracle.
@Robert Hahn It did, however, acquire the employees in Santa Cruz working on the UNIX products. That it didn't acquire the Santa Cruz campus itself is irrelevant.
Wow, can't believe this one was left out. NCR and AT&T in 1991. AT&T screwed it up so bad NCR went independent again in 1995.
@rollguy Was on an original long list, but I stopped at 10 companies. 
Verisign + Network Solutions. $21 billion going in, maybe $800 million going out. That's a writedown worth mentioning.
I don't know how Sprint's merge with Nextel is not on here.
IBM becoming the darling of the US DOD in the 1960's. Held back the development
of IT for years. Really an "anti-merger" -much of the competition was streets ahead of IBM (as was revealed in the "Telex" lawsuit).
But, hey-ho, Old Ma Bell (a private monopoly that cleverly kept itself going for years) (I'm old enough to remember the ads. in the Nat. Geog. it placed in the 1940's) delivered the goods. C, C++, the transistor, Unix / Linux etc.
of IT for years. Really an "anti-merger" -much of the competition was streets ahead of IBM (as was revealed in the "Telex" lawsuit).
But, hey-ho, Old Ma Bell (a private monopoly that cleverly kept itself going for years) (I'm old enough to remember the ads. in the Nat. Geog. it placed in the 1940's) delivered the goods. C, C++, the transistor, Unix / Linux etc.
The world should NEVER forget the part Microsoft had in SCO attacking Linux.
Alcatel + Lucent
It would be nice to list the Worst 30 mergers and their brieft history. Let the readers choose for themselves. Each voter has up to 3 selection of their choice.
Let's the fun begin.
Let's the fun begin.
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Lay off the booze, farshad_1134, and please STOP SHOUTING. You're making no sense at all.
Ther is no such word as layed it is laid. "What followed was to be expected. Thousands of employees were layed off" (Sun-Oracle)
"While this future device development was underway, in October 2009, Danger incurred a catastrophic data loss resulting in complete business continuity failure at one of its data centers which was hosting personal customer data used T-Mobile Sidekick product that eventually took two months to recover from." (Microsoft-Danger) This quote is not readable, it has some missing words. It might have been better to break it up into multiple sentences.
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I swear, if I had gotten one more "Join AOL" CD in the mail I was going to kick my dog! They wasted approximately 25% of the earth's resources on producing and mailing those things. I even know one guy who built his house from old AOL marketing CDs. The only good those things ever did was to fund the postal service. After they went away, the postal service had to raise the postal rates across the board just to stay in business. (Never did kick the dog, thank goodness)
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I always thought a Sun Apple merger would have been a match made in heaven. Very little overlap in their lines while both were considered best-in-breed; Sun in server space and Apple in desktop space. Sun could have picked up Apple cheap when it was on the skids in 1995. Apple could have picked up Sun cheap when it in the early 00's.
Expect next year to include Google/Motorola.
Moto is going to bleed Google's cash like a cut on an artery of a person taking anticoagulants.
Moto is going to bleed Google's cash like a cut on an artery of a person taking anticoagulants.
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