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MySpace & News Corp.
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 my 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.
Google & Motorola
In 2012, Google purchased the handset/tablet division of Motorola, for $12.5B. Over the next two years, Motorola essentially floundered with its product releases and was one of the worst offenders in lagging Android OS updates of all the Android handset OEMs.
The Google and Motorola Mobility merger failed on so many levels that it's hard to quantify the extent of the incompetence that surrounds it.
Not only did Motorola consistently fail to innovate after being acquired by Google, but during its time under Google's ownership, the company released a number of Android handsets of questionable quality, stability and performance, that have been mired by shovelware and awful user interface overlays.
The company has also reneged on its promises to upgrade an entire generation of dual-core handsets released in late 2011 to Ice Cream Sandwich, effectively leaving many of its existing customers in the lurch.
To add insult to injury Google sold much of Motorola's manufacturing capability to Flextronics, which begged the question of what the Silicon Valley search giant really intended to do with Motorola's engineering and future handset and tablet plans, especially since Google partnered more and more with companies like Samsung, Asus and LG for its "Nexus" line of products.
Google did eventually try to integrate Motorola into the company, and release a flagship handset, the Moto X, which had the distinction of being manufactured in the United States and having many different unique customizable designs that could be ordered to personalize the look of the product.
Unfortunately, the Moto X was not a big hit in the marketplace. Google recently decided to cut its losses with its less than 2-year romance with the company, selling it for $2.91B to Lenovo.
Google is retaining much of the patents from Motorola and also the company's research facility, so it isn't a total loss for them. Still, this is a fling that will almost certainly go down as one of the search giant's biggest failures.
Zynga and OMGPOP
In what is probably the most "WTF" of all mergers and acquisitions that took place in 2012, none made more sense than Zynga's $200 millon 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, Zynga ended up erasing all of its profits for CY2012 and having to cut about five percent of its workforce. And it's questionable as to whether or not the company was able to retain its DrawSomething! userbase as a result of the acquisition.