Top 10 smartest acquisitions of all time

Google paid $3.1 billion in 2007 to buy DoubleClick. This is believed to be one of the most important deals that helped extend Google’s advertising reach to the whole of the internet. Google gained more than $20 billion from DoubleClick and its list of associated products in just one year in 2019. This deal helped to add $126.9 billion to Google’s market cap, while the absolute dollar return Google realised through the acquisition was $123.3 billion.

Facebook’s acquisition of Instagram in 2012 was a $1 billion deal. This acquisition added $153 billion to Facebook’s market cap. The absolute dollar return from the deal was $152 billion. This is one of the greatest acquisitions in history and according to Bloomberg, Facebook generates around $20 billion as revenue from Instagram alone. While Google has to spend a considerable portion of YouTube revenue to pay the creators and manage other expenses, all of the income from Instagram goes to Facebook’s coffer.

In 2006, the total purchase price of YouTube by Google was $1.65 billion. Estimates show that YouTube contributes to around 10% of Google’s revenue. YouTube is the second most-popular search engine in the world, next only to Google. YouTube’s annual revenue grosses at $15 billion. YouTube contributed $86.2 billion to Google’s market cap and the deal fetched $84.5 billion to Google in absolute dollar returns.

NeXT’s operating system is one of the leaders in modern operating systems considered on par with iOS, MacOS, WatchOS and others. Apple’s acquisition of NeXT in 1997 was a $429 million deal. The said acquisition contributed $63 billion to Apple’s market cap and the absolute dollar return is estimated at $62.6 billion. Studies show that every single dollar of Apple’s annual revenue ensues from NeXT roots.

Android was acquired by Google in 2005 and the deal was worth $50 million. The absolute dollar return from the deal is estimated at $72 billion and the acquisition added $72 billion to Google’s market cap. This is the stuff of venture capitalists’ dreams. This deal is considered one of the biggest acquisitions in history that helped Google multiply its return on investment 1400 times.

In what is deemed as one of the most profitable acquisitions ever, The Priceline Group acquired Booking.com, a European hotel booking website, in July 2005. The said acquisition was so impactful that it added tens of billions to Priceline’s market cap. The purchase price of Booking.com was $135 million and the company fetched $46.6 billion in return, generating a profit of $1.1 billion in 2011.

In 2002, eBay paid $1.5 billion to acquire PayPal. The deal was no doubt profitable to eBay. In July 2015, eBay decided to spin off PayPal into an independent public company and the value realised during this spin off was $47.1 billion. This was 31 times more than what eBay paid while purchasing the firm thirteen years back. The absolute dollar return from the deal was $45.6 billion.

Google Maps originally began its journey as a C++ program known as Expedition and it was designed by Lars and Jens Rasmussen, the founders of Where 2 Technologies, Sydney, Australia. Expedition was meant to be downloaded separately by the users. Later, they pitched the program to Google as a web-based product. In the said acquisition valued at $70 million in October 2004, Google got $127.9 billion in return. After purchasing Expedition, Google converted it into the web application known as Google Maps. Google also acquired Keyhole, a company concerned with geospatial data visualisation. Later Google incorporated the aspects of keyhole into Google Maps.

ESPN was acquired by ABC/Disney in 1984 and the total purchase price was $188 million. This acquisition is still considered the G.O.A.T of media acquisitions. In 2018, ESPN fetched $10.3 billion in revenue. For 35 years, the value of ESPN was seen compounding year on year. While the absolute dollar return of the deal was estimated at $31 billion, the acquisition contributed $31.2 billion to Disney’s market cap.

In 2009, Disney purchased Marvel in a $4 billion deal. The deal fetched the firm an absolute dollar return of $16.3 billion. The acquisition contributed $20.5 billion to its market cap. Recent estimates show that Marvel generates around $6.7 billion for Disney in annual revenue. Therefore, Marvel contributes to around 10% of Disney’s earnings. Since Disney acquired it, Marvel Cinematic Universe Films have grossed $22.5 billion as box office receipts in total.