Facebook CEO Mark Zuckerberg decided to drop a cool $16 billion on
WhatsApp, a messaging service with 450 million users. It was a
mind-boggling sum, even if you buy into Facebook's argument that
WhatsApp (which will continue to operate as an independent subsidiary,
at least for the moment) will soon connect a billion people around the
world. But it wasn't the biggest tech acquisition of all time:
that honor belongs to Hewlett-Packard, which bought Compaq for (an
inflation-adjusted) $33.4 billion in 2001. Facebook's purchase of
WhatsApp comes in second on the list, followed by Hewlett-Packard's
purchase of Electronic Data Systems for $15.4 billion; Google's
acquisition of Motorola Mobility for $13 billion, and Oracle snatching
up Peoplesoft for $12.7 billion. In sixth comes Hewlett-Packard again,
with its Autonomy buy in 2011 (for $11.7 billion), followed by Oracle's
BEA Systems acquisition ($9.4 billion) and Microsoft seizing Skype ($9.0
billion). What do many of these highest-cost purchases have in common?
Many of them didn't pan out. Hewlett-Packard's Compaq, Autonomy, and EDS
acquisitions, for example, made all the sense in the world on paper,
the tech giant eventually took significant write-downs on all three
(Autonomy in particular was an outright disaster, resulting in a $8.8
billion write-off and widespread allegations of financial and management
impropriety).
