Deals in Media & Tech - April and May 2018

Another look at recent strategic M&A deals:  I think that these provide a good indication of the future direction of both the large tech companies, and also society.

Mobility - 

This is one of the areas that seems to be moving fastest, both with improvements in autonomous driving (also an AI problem), and new ways to move around cities.

Bikes are the flavour of the month, with at least 3 new dockless schemes now in operation in London, for example, and the new that Uber has bought electric bike company Jump, may buy the company behind Citi Bike and Ford GoBike, and will be incorporating bikes into its apps in some cities.  In Asia Meituan Dianping has bought MoBike for a staggering $3.4bn making it one of the two biggest Chinese bike sharing companies.  Bikes are clearly going to be very central to how we get around cities in the next few years!

Payments - 

Lots going on - There is a trend towards vertical integration, with Square buying both Weebly, the site that lets people create their own websites, and Zesty, the food delivery app.  Food delivery is growing fast, and this gives Square a stake in the market, while the purchase of Weebly is a good way to meet new companies setting up a commerce platform for the first time.

Elsewhere, Paypal has bought iZettle, the 'European answer to Square' which gives them access to lots of small merchants, including market traders, and also Jetlore, an AI-driven marketing company.  Paypal has so much data on payments, so buying a company that specialises in analysing it seems like a good move.

Food - 

Pet food - Nestle Purina has bought a majority stake in Tails.com, a direct to consumer pet nutrition company that sells food personalised to the pet.  In a way it's a bit like Unilever's purchase of Dollar Shave Club, because Tails.com must have lots of knowledge about owners, digital innovation, and selling directly.  Pet food is a massive market - in the UK, for example there are more dogs than babies - and this deal makes lots of sense.

Technology - 

Saving the biggest deal til last, Microsoft has paid $7.5bn for GitHub, the 'library for software' site.  In a way it's a hard deal to work out - GitHub had taken lots of investment, but never really made much money as it's fundamentally a free service for developers.  However it puts Microsoft at the heart of the developer community for the first time in years, and gives them access to a comminity that they want to encourage to develop for all their new platforms.  Lots of intangible benefits here.

Deals in Media & Tech - March 2018

A quick look at some of the biggest deals in media and technology last month, with some explanations for why the deal took place.

Google bought the 'gif keyboard' platform Tenor
Tenor is one of the biggest media companies that you'd never heard of.  While Giphy had bigger brand recognition, Tenor has a similar offering, and has a similar reach. 

When users search for gifs to use in messenger apps like WhatsApp, Facebook Messenger, or even Twitter direct messages, they get either Tenor or Giphy assets.  These companies make money by allowing brands to own keywords or phrases like 'Happy' or 'TGIF', and Tenor has billions of these searches each month to monetise. 

Unlike a lot of other searches, these are from people searching based on emotions and feelings, rather than intentions.  The deal also allows Google into the Facebook, Twitter, WhatsApp etc ecosystems - until they block Tenor (which they presumably could do). 

I love this deal though - and in retrospect I should have seen it coming!

Grab bought Uber's business in South East Asia
This deal is about both regional consolidation in the taxi and logistics industries, and a recognition by the Uber board that they can't be big everywhere and that they need to focus on their core markets. 

It also seems possible that Uber is getting out of the business to business delivery business - Uber Freight - again to focus on taxis.

Apple bought the 'Netflix for Magazines' app Texture
Texture is an iOS app that gives you unlimited access to about 200 magazines for a $10 a month subscription.  Android versions are available - try Readly - but this one for iPhones and tablets must attract a good, affluent audience base, the sort that Apple wants to keep loyal to their devices. 

I suspect that Apple won't change the app much, but might be able to offer combined subscriptions with Apple Music and other services.  As Apple starts to focus more on content, this seems like a logical buy.

Foxconn bought Belkin
Foxconn is well known for making lots of the tech that we use, from phones to gaming consoles, for companies like Apple and Nintendo.  The purchase of computer accessories and peripherals brand Belkin shows that they may be looking to make more goods for themselves to brand and sell - which would presumably be a more lucrative (but risky) strategy.

Deals in Media & Tech - February 2018

Each month I look at the biggest and most interesting deals in media and technology.  I think that these deals give a really good steer to the future plans of these companies, including a possible glimpse of future services.

February was quite a quiet month for deals, but arguably the best was saved for the end - Amazon's purchase of Ring, the smart door lock company.

Amazon & Ring
This deal has the potential to solve the oldest problem in eCommerce - what to do if you are out when the delivery man calls.  Ring makes a smart door lock that allows the owner to let visitors in remotely, either if they are 3 stories up in their apartment, or nowhere near their home.

It will allow Amazon to extend their 'Amazon Key' service, announced last year, that would essentially do the same thing, but without the reach and brand name of Ring.  As a home owner, you could give Amazon the right to enter your property (the device would either use a scanned code or - maybe - face recognition), and even put fresh produce into the fridge.

Amazon has also announced plans to launch a stand-alone delivery business, competing with people like DHL.  This will give them an enormous competitive advantage.

Looking a few years ahead, given Amazon's interest in health care, it could also be the means by which doctors or carers get access to the home.

At an estimated billion dollars, it's Amazon's second biggest deal, reinforcing how potentially game-changing this is.

Bosch & SPLT
SPLT is a B2B ride-sharing service, and by buying it Bosch gets more credibility in 'mobility' space, which it already dabbles in via COUP, its scooter rental business in Berlin, Paris and Madrid.  It's part of the trend of manufacturers trying to move into services.  Maybe, like Dyson, Bosch has plans to make its own electric vehicles?  It just shows how demarcations and boundaries between different industries are breaking down.

Niantic & Escher
We didn't hear a great deal about Pokemon Go maker Niantic last year, but 2018 looks to be a very busy year, with the launch of a new Harry Potter game.  The purchase of Escher reportedly gives them access to technology that makes AR objects more 'permanent' between different users (if I move a table, you also see it in its new place) which will add interesting possibilities to multi-player games.  

Amex & Mezi
Bots haven't really set the world alight, but there are still lots of companies using them, and trying to make ones that are useful.  Mezi already supplies the tech behind Amex's 'AskAmex' personal concierge, so their purchase must surely be a vote of confidence and a sign of the importance Amex sees in the project.  

Deals in Media & Tech - January 2018

Image source

I will be reviewing some of the deals in media and tech every month.  I'm fascinated these deals because one way to analyse the future direction of the big companies is to look at what sort of companies they are buying.  When I write my trends reports, I often look back at these, as proof that certain fields are generating lots of interest.

Google, Amazon, Facebook, Apple and others are currently very acquisitive.  Each is using their large profits to buy companies that can help them gain competitive advantage in areas like AI, commerce, and delivery, to fill in gaps in their capabilities, and to (maybe) stop others from getting hold of the companies or key employees.

Nothing in January was as high profile as Disney’s deal proposed deal to buy Fox, or Westfield’s sale ot Unibail, or even Apple’s purchase of Shazam, which all happened in December.  However there were still lots of M&A action, and here are some of the more interesting.

Facebook bought Confirm.io, a company that uses biometrics to quickly verify people’s identities.  Real identity is at the core of Facebook’s value - while MySpace let you choose an identity, Facebook knew that real IDs would be far more valuable to other users (& advertisers) - and this will help them verify people better.

Google bought Redux, a flat panel speaker company.  Flat speakers have attracted lots of attention over the years.  NXT, a UK speaker company, was part of the tech stock boom in the late 1990s, as people get very excited by the idea of how much space in devices, cars etc could be saved if speakers could be flat.  My guess would be that Google will use Redux’s tech in its new devices like phones and smart speakers.  Will everything suddenly get flatter?

‘Mobility’ is a big trend at the moment.  Lots of car companies have bought into, or created their own car sharing schemes, and now BMW has bought Parkmobile, the largest mobile parking operator in the US.  As mobility and cities change, parking is likely to become more important - figures estimate that 30% of traffic is caused by people looking for somewhere to park - and so this is a good, if initially surprising buy.

It’s not a full purchase, but by buying 10% of What3Words, Mercedes will strengthen their position in mapping.  In 2015 Mercedes, together with BMW and Audi, bought Nokia’s mapping technology.  Now this deal takes Mercedes further into location, especially into places like Africa that has less developed maps.  Navigation is vital for lots of things like satnav and autonomous vehicles - I wonder if others will also try to buy into W3W.

Finally, two purchases that show that having an app is increasingly important.  Delivery company InstaCart bought Unata to help it get deeper into the ecommerce ecosystem.  Unata is a Canadian service that helps grocery stores easily build their own storefront app.

Meanwhile, Apple bought Buddybuild, a suite of tools that helps developers rapidly build and debug their own apps.  People always say that Apple’s business is all about selling devices, but on top of this they make an estimated $100m a day from the app store.  Again, anything that will make creating apps easier, and give Apple more control over the ecosystem can only be good for them.