A colleague here at Mashable proposed an Onion-style spoof story entitled "Google Buys Everyone," which would detail how the search giant hoovered every company in existence. As Homer Simpson once said, "It's funny because it's true."
Google's insatiable appetite for other companies was just one of the business narratives of 2011, though. The other was the handful of social media IPOs that were eager to align themselves with the loony Dot-com era, a baseless comparison if there ever was one.
Whatever the case, for a lot of folks in the social media/tech industry, 2011 was a good year to cash out. Here's a look at the two primary methods: going public or getting acquired (often by Google).
Linking In to Wall Street
Social media's first test of investor enthusiasm came in May, when LinkedIn went public. Judging by the initial success, LinkedIn passed the test with flying colors. Shares doubled on May 19, the day the company went public, and though they have fallen off a bit since, were still way above opening price at press time.
LinkedIn's roughly $6.4 billion valuation is mostly based on hope of future growth. The company turned a small ($4.5 million) in its second quarter, but then lost $1.6 million in its third quarter. However, the network grew its revenues by 126% that quarter and it keeps bulging with new subscribers (the current figure is 130 million). With three revenue streams — advertising, recruiting and premium subscriptions — LinkedIn is one of the safest social media investments, but at this stage, is bent on growth over stable profits.
LinkedIn's rather pacific IPO was followed by another low-key IPO for Pandora Media in June, but in July the debt ceiling standoff and the European monetary crisis spooked the market. That caused another of the year's most anticipated IPOs, Groupon's, to be delayed until November.
Though Groupon had a strong showing the day it went public, within a few weeks, the stock had fallen so far that it just about wiped out any gains achieved that first day.
And Zynga, which had also pushed back its IPO after the summer's market crash, eventually moved ahead with its plans to go public late in the year. However, it also suffered a dip in stock price.
Given the limited amount of companies going public and their ho-hum stock performances, the comparison between social media IPOs and the Dot-com bubble is pretty weak. The latter era actually lasted from 1995, when Netscape went public, until the 2000 Super Bowl, which was notoriously flooded with Dot-com ads for companies that would cease to exist within a year or two.
In comparison, the trickle of social media IPOs will likely end whenever Facebook goes public (reports say that will happen next April). You call this a bubble? Somewhere, the Pets.com sock puppet is laughing.
The Ever-Expanding Googleplex
Speaking of the '90s, the federal government smackdown of AT&T's proposed $39 billion T-Mobile takeover rings familiar of the days when the Department of Justice was considering splitting Microsoft in two. Citing the possible effect on wireless competition, the DOJ filed suit to block the merger in August. The FCC soon piled on too. The deal is now dead in the water.
Government action likely reined in some of Google's ambitions. Though one report had Google sizing up Yahoo for an acquisition, Google's biggest real-world scrutiny is likely to come from its pending $12 billion purchase of Motorola Mobility.
That proposed acquisition would cap Google's 2011 spending spree, which included restaurant rating firm Zagat, social data startup PostRank, CleverSense and AdMeld, among others.
Google's high profile has caught the attention of the feds. In August, in an appearance that many compared to Bill Gates' 1998 testimony before the Senate, Google chairman Eric Schmidt was questioned by the Senate Judiciary about Google's effect on competition. Despite its many acquisitions, perhaps Google will be able to avoid the wrath of antitrust regulators by learning from Schmidt's deft handling.
Similarly, Microsoft, made its own huge acquisition in 2011, the $8.5 billion purchase of Skype. With its $30 billion-plus war chest, Microsoft is rumored to be looking for other buys as well, including Nokia, which would be an interesting hedge against the Google/Motorola entity.
Apple's $81.5 billion in cash dwarfs Microsoft's booty, however. Anticipating Apple's moves is tough, but linking the company to a potential acquisition target has become a favorite parlor game among bloggers. As the year draws to a close, though, Apple has mostly resisted the urge to snap up other, smaller companies, hence that huge stockpile of money.
Perhaps Apple's reluctance was based on Steve Jobs' disgust for startup founders whose only goal was to sell their companies for a quick buck. Even if Apple holds to that philosophy, though, such savvy entrepreneurs will still have a lot of potential sugar daddies to choose from, including, of course, Google.
Image courtesy of Flickr, cambodia4kidsorg
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