Apple Becoming More Serious About Corporate Acquisitions?
BusinessWeek reports on Apple's recent acquisitions of Lala Media and Quattro Wireless, noting that the moves may be part of a broader strategy by the company to utilize its vast cash hoard to increase its historically low frequency of such acquisitions.
In particular, the report notes that Apple last year hired Goldman Sachs investment banker Adrian Perica to assist with such deals. The hiring of Perica, who is believed to be the first dedicated mergers & acquisitions specialist on Apple's staff, reportedly replaces a "super ad hoc" process in which Apple department heads were themselves responsible for building the case for an acquisition and negotiating the terms.
Jobs has long preferred for his company to develop technology in-house and avoid the risks that come with integrating other companies into Apple's unique, finely tuned culture. In the past, there was no organized M&A effort, say three former executives at the company. Instead, business chiefs were supposed to keep an eye out for deals and go to Jobs if they thought there was a beneficial one to be made. After getting Jobs' O.K., the champion of the idea would pull together a team to make an overture, negotiate terms, and work through the administrative details. "It was super ad hoc," says one of the former executives.
A turning point for Apple was reportedly Google's acquisition of mobile advertising firm AdMob. Apple had reportedly been in discussions to acquire AdMob itself when Google swooped in and made its deal. Stung by the loss of AdMob to Google, Apple apparently moved quickly in its bid to lock up streaming media firm Lala as Google and others began to get involved.
According to the report, experts believe that Apple is unlikely to engage in any blockbuster acquisition deals, instead relying on the small deals that bring very specific technologies, intellectual property, and talent to the company and that the company has relied on in the past. The addition of Perica and the loss of AdMob to Google's grasp, however, suggest that Apple may be looking to become more aggressive in its pursuit of those companies that fit its needs.