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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.
HP & Autonomy
In addition to the scuttling of the TouchPad and the WebOS/Palm division at HP, Leo Apotheker's very short term as HP Chairman and CEO will be always known for the company's $11.1 billion acquisition of Autonomy, a European maker of unstructured data analytics software.
At the time the purchase occured many industry observers were keen on figuring out what HP would do with the technology after the acquisition, and well over a year later HP has still not effectively communicated how it fits in to its overall enterprise software strategy.
But the real bombshell came in 2012 when the company announced that after an internal investigation, HP had discovered there were severe accounting improprieties at Autonomy during its acquisition and would have to write down almost a $9 billion loss, sending the company's stock into a tailspin.
This alone probably makes the Autonomy purchase by HP the most infamous and wasteful cash spend for a software assset of all time.
Facebook & Instagram
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 Instagram 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.
Ten months after the acquisition, Instagram is still an independent 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 recently cut off the use of Instagram's "cards" API to Twitter, which has enraged many of Instagram's core user base that actively uses both services. Kerfuffles (and about-faces) over Instagram's terms of service and photo usage rights by Facebook haven't helped the company's image either.