HP acquires Compaq for US$24.2 billion
HP sent shockwaves through Silicon Valley when it moved to buy Compaq - then one of its biggest rivals - for a massive US$24.2 billion in 2001. Even then, the deal was thought to be a stretch, with Wall Street sceptical about HP's chances of turning its struggling rival's fortunes around. It has now been revealed as a disaster. The son of one of HP's founders confessed in 2011 that the deal was a "US$25 billion mistake".
Yahoo buys Tumblr for US$1.1 billion
A nervous ripple rolled through the blogging community when Tumblr, a platform marketed for its youthful, rebellious tone, was purchased by the stodgy, purple-clad internet giant Yahoo for US$1.1 billion in May last year. The blog company's chief executive David Karp was well aware of the dissatisfaction. He reportedly assured employees "We're not turning purple," before signing off with "f*** yeah, David"
Yahoo was applauded for its "bold move". But it is still too early to say whether the purchase will pay off.
Microsoft buys Skype for US$8.5 billion
Microsoft paid 32 times Skype's operating profits to purchase the web-based communications service in 2011. The deal was met with cynicism in some quarters, partly due to Microsoft's long history of botching purchases. Despite that the deal is looking good. Guardian commentator James Arthur - who initially criticised the Skype purchase - says the company is likely to stay inside the Microsoft stable for a decade to come.
Facebook buys Oculus for US$2 billion
Facebook's decision to purchase Oculus for US$2 billion today is a gamble on the future of communications technology. The virtual reality company has generated buzz for its Oculus Rift headsets. However, so far the only interest in the technology has come from gaming companies. Facebook hopes it will extend beyond the world of gaming to shape the way we interact online. Facebook chief executive Mark Zuckerberg said Oculus was "a strong candidate to emerge as the next social and communications platform."
It's a costly venture into as-yet untested waters, with the price tag twice the amount the company paid for Instagram.
However, it isn't even close to Facebook's biggest ever purchase. That title goes to...
Facebook buys WhatsApp for US$19 billion
Google's biggest acquisition, Motorola Mobility, cost US$12.5 billion. Microsoft's largest purchase was its US$8.5 billion deal for Skype. Apple has never done a deal worth more than US$1 billion. Those figures put the risk Facebook took when it purchased Whatsapp in perspective. The US$19 billion takeover completed in February was the largest ever for a venture capital-backed startup. It is thought to be part of Facebook's plan to consolidate its future as a "multi-app" venture.
"Facebook seems to be in acknowledgement that people are using a lot of different apps to communicate," said eMarketer analyst Debra Aho Williamson. "In order to continue to reach audiences, younger in particular, it needs to have a broader strategy...not put all its eggs in one basket."