American College Dublin
Course: Corporate Finance
Name: Liam Rogers
Student Number: 2065259
Table of contents:
· History of companies.
· Reasons for the merger.
· Reaction of Stakeholders/Competitors.
· Finance/ the Deal.
· Conclusion/Will this be a success?
Describe a merger or acquisition that has taken place in the last 3 years.
History of Microsoft:
Microsoft is a multinational computer technology corporation. The history of Microsoft began on April 4, 1975, when it was founded by Bill Gates and Paul Allen in Albuquerque. Its current best-selling products are the Microsoft Windows operating system, Microsoft Office suite of productivity software, Xbox, a line of entertainment of games, music and video and Bing, a line of search engines. All of this started out as their hobby in high school, they began programming on the original PDP-10 from the Digital Equipment Corporation, and began to go on to create Microsoft, they were just 3 normal people doing what they loved until they discovered a niche in the software market. In 1980 just 5 years after developing they created a partnership with IBM, this allowed them to merge their software with IBM computers enabling them to develop their software and generate revenue as they paid Microsoft for every computer they sold with the software on it. In the early 1990s Microsoft launched several versions of Microsoft windows, this was a major step for them as they captured 90% of the market shares on the world’s personal computers, Microsoft is constantly updating and developing new software’s such as, Excel, PowerPoint, Access and Word, because of this and recent developments, Microsoft is the largest company dedicated to creating computer software to this day.
In recent times, Microsoft have had many acquisitions, some major success and some major failures. Their biggest success to this day was Skype. Microsoft acquired Skype for $6.9 billion dollars. Skype's market share in international calls grew from 13 percent to 34 percent since the Microsoft acquisition this shows just how much of an impact they had. In just 2 years of acquiring Skype sales were expected to hit $2 Billion dollars up from $800 million in 2011.
Microsoft's worst acquisition and most expensive blunder to date was aQuantive an advertising company. Microsoft acquired aQuantive on August 13th, 2007. Soon after they realised that acquiring an advertising company was no way to compete with their biggest rivals, Google.
After just five years of acquiring this company (2012) Microsoft dropped $6.2 billion, this was almost the whole cost of the operation in the first place, they took the risk and the risk did not pay off.[endnoteRef:1] [1: Microsoft - History of a Computing GiantIn-text: (Bellis, 2016)Your Bibliography: Bellis, M. (2016). Microsoft - History of a Computing Giant. [online] About.com Money. Available at: http://inventors.about.com/od/CorporateProfiles/p/Microsoft-History.htm [Accessed 28 Nov.]