M&A - Tech Industry

In the Tech industry could be identified six categories where M&A are concentrated: Software/SaaS,
Internet and Digital Media, It Services, CPE (computers, peripherals and electronics), Semicon and
CE (communications equipment). The following figure shows the distribution of M&A in each
category in the year 2012.



As we can see the internet and digital media segment was one of the most popular targets for
acquirers in 2012.
Following this approach, below its shown the Internet and Digital Media Landscape where the
players of the industry have the options to choose how to develop and support the growth of their
business.







As we can see in the picture, Social
Network is just one of the elements of
the Internet and Digital Media
Landscape. In this landscape,
companies like Facebook has a wide
universe of options to choose when
they want to make M&A.

The next figure shows the Social
Media Landscape in details.
Social Media Landscape:
Following its enormous user popularity, social media has attracted considerable commercial attention,
supported by the potential offered by its large respective user bases, i.e. Facebook (550mn), Twitter
(65mn tweets daily), YouTube (2bn daily video views). Investors are interested in business opportunities
associated with seven major social media categories: content, share, discuss, commerce, location,
network and gaming.

As an important recent trend, social networking companies such as Facebook and Twitter have begun to
acquire owners of innovative technology at early development stages with the intention that they
enhance their existing (or add new) capabilities. Similarly, other companies have started acquiring social
networking technologies in order to diversify their existing product portfolio. For example, Facebook
spent $15mn to acquire Hot Potato Inc, an online chat applications developer for live events. It also
bought Divvyshot in order to add the companys photo-sharing platform to its portfolio.




M&A Drivers in the Tech Industry: What social media companies are looking for with their M&A?


Overall, the key reasons for implementing an
M&A strategy are to develop new
services/products (59%) and acquire new
clients/ verticals (43%).


Nearly four in ten (38%) respondents are
motivated by the possibility of expanding
their geographic reach while one-third (33%)
plan to capitalize on the favorable buying
opportunities in the marketplace.