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M&A as R&D in Technology

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Summary

This article discusses how technology companies have used acquisitions as a form of research and development. It looks at how companies such as Snap and Google have used acquisitions to acquire a talented team, experience, know-how, and passion in a specific area, as well as products that have not taken off as businesses. It goes on to give examples of specific acquisitions made by these companies and how they have used them to develop core features of their platforms. It concludes by highlighting how this strategy can be used to enter new markets and acquire new technologies and knowledge.

Q&As

What are some of the ways successful tech companies have used acquisitions?
Successful tech companies have used acquisitions to expand into new areas and serve as a form of R&D. They buy a mix of a talented team, experience, know-how, and passion in a specific area, and a product that is unreleased or in its early stages but has not quite taken off as a business.

What acquisitions has Snap made to expand its platform?
Snap has acquired Zenly for $213M, AI Factory for $166M, Looksery for $150M, Fit Analytics for $134M, Vurb for $115M, Bitstrips for $65M, Scan Me for $50M, Addlive for $30M, Vergence Labs for $15M, PlayCanvas in 2018, and Screenshop in 2021.

How has Google used acquisitions to launch new products?
Google has used acquisitions to launch Google Adsense, Google Maps, Android, Google Docs, Google Slides, Google Voice, DoubleClick, Admob, ReCaptcha, and more.

What are the benefits of using acquisitions as a form of R&D?
The benefits of using acquisitions as a form of R&D include the ability to acquire new technologies, knowledge, and personnel and short circuit the time to enter a new market and get up to speed in a new area.

What are some of the other companies that have successfully used this approach?
Other companies that have successfully used this approach include Apple, Microsoft, Amazon, and Uber.

AI Comments

👍 This is an excellent article that provides a comprehensive overview of how tech companies have used acquisitions as a form of R&D. The examples given provide great insight into how this strategy can be applied and how it has worked for some of the most innovative companies today.

👎 This article does not provide any examples of companies that have not been successful with this strategy, so it is difficult to get an overall picture of how effective it is.

AI Discussion

Me: It's about how tech companies have used acquisitions as a form of R&D. It talks about how companies like Google and Snap have used relatively small acquisitions to expand into new areas and serve as a form of R&D.

Friend: Interesting. What are the implications of this?

Me: It shows that acquisitions can be a really effective way to expand into new areas and acquire new technologies and personnel. It also shows that even the most innovative companies still use acquisitions to jumpstart their expansion and get up to speed in a new area. It's also a great way to cut time to market significantly.

Action items

Research other successful tech companies that have used acquisitions as a form of R&D.
Analyze the benefits of using acquisitions as a form of R&D for your own business.
Develop a strategy for using acquisitions as a form of R&D for your own business.

Technical terms

M&A: Mergers and Acquisitions.
R&D: Research and Development.
Subscribe: To sign up for a newsletter or other service.
Acquisitive: To acquire or buy something.
Adjacent: Closely related or connected.
Distribution: The process of making a product or service available to customers.
Contextually: In relation to the context or circumstances.
Ad tech: Advertising technology.
ReCaptcha: A security measure used to tell humans and bots apart.