Tech Acquisitions in 2012: Where Does Search Fall?
January 28, 2013
I read “Report: There Were 94 Tech M&A Deals in 2012 above $100M. Average Deal Value Was $717M.” Interesting stuff. Let’s assume that the data are accurate. Where do to search system buys outs fall.
Autonomy sold for $11 billion but that number may be soft due to the Hewlett Packard write down of $8.8 billion. I don’t have a dog in the fight, but the matter does suggest that some acquisition deals in search were overoptimistic.
Vivisimo sold to IBM for about $20 million. This is a fuzzy number which I heard about from poobahs at a trade show. If the number is accurate, Vivisimo sold to IBM for about the 2013 estimated revenues. However, Vivisimo is not a search company. Vivisimo was, at the time the deal was announced, was a big data company.
Brainware and ISYS Search Software sold for undisclosed amount. The amount Lexmark paid is not known. Lexmark did pay $280 million for Perceptive Software, so let’s assume that these transaction were less than $280 million. Close enough for horseshoes.
Oracle has not disclosed how much it paid for Endeca. Endeca, a privately held company, sold for about $1.1 billion. Again the only source I have is poach outputs.
So what?
- Search can yield some nice payouts
- Paying too much for search can trigger some interesting post purchase hand wringing
- Search is not really search. The reason people buy search companies is to get customers and solutions to specific problems like customer support or “meaning based computing.”
With some venture firms pumping money into search and content processing vendors, the likelihood of a big payday exists. On the other hand, search, like other software niches, poses some significant risks in my opinion.
Stephen E Arnold, January 28, 2013
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