Some things go together like peanut butter and jelly. Others are more like peanut butter and motor oil. The joining of tech titans is no different. Here we discuss whether six high-profile mergers have made a tasty combination or a gross one.
Batman and Robin. Siskel and Ebert. Great Britain and the United States in World War II. Cookie dough and ice cream. Usually, when two distinct entities join together, they form one opposable force.
Or do they? While there are major success stories to be found when two large tech companies come together, there's a Time Warner-AOL fiasco for every Oracle-Sun combination.
To see how a few mega-mergers are faring so far, CIO.com decided to check in with a few analysts and experts to get an update on the tech titans of today. Some are working, while others seem poised to join the ranks of the bad tech mergers.
Yahoo and Tumblr: Not Much Has Changed
Yahoo acquired Tumblr in May 2013 for $1.1 billion. Since then, Tumblr hasn't changed significantly, with user counts having only risen about .16 percent over the last year, per Compete.com.
IT analyst Charles King says there was some initial concern over how Yahoo would handle adult-oriented content on Tumblr, but the issue has not raised a stir recently. "It's clear Yahoo hopes it can monetize Tumblr as part of its unified advertising strategy," he says.
Facebook and Instagram: Strong Growth to Fend Off Competitors
With some high-profile mergers such as Time Warner and AOL, users responded by fleeing to the hills. When Facebook acquired Instagram in 2012 for $715 million, it seemed like no one noticed (though, King wonders why any company would pay $3 per user.) In fact, one report suggests massive growth - 90 million new Instagram users since the end of 2012.
Consumer analyst Rob Enderle says the story is still unfolding. There are signs that Facebook will be able to monetize Instagram's still strong user base and that the combination will help fend off mobile competitors such as Snapchat. ( Facebook's recent acquisition of WhatsApp may help here, too, though it's much too soon to tell.
Dell and Wyse: With New Thin Client, So Far, So Good
By most accounts, the Dell acquisition of Wyse in 2012 for a reported $400 million has worked out quite well: The new Cloud Connect thumbdrive plugs into any HDTV to use that screen as a secure thin computer. This kind of remote cloud access using a thin client is an important step away from the "personal computer" where files are stored locally. "Dell is making a smart move by embracing the cloud," says Braun.
Google and Motorola: Keeping Patents, Ditching Hardware
At the time of Google's $12.5 billion acquisition of Motorola (May 2012, when Chinese regulators gave it the OK), the marriage of the Android OS with a popular hardware brand seemed logical. Google needed a hardware platform to lead the way for partners like Samsung and HTC. Unfortunately, it hasn't worked out; Lenovo is buying key parts of Motorola, the famed company that invented the cell phone, for less than $3 billion. Google will retain key patents - which might have been the goal all along.
"This loss-making division was supposed to usher in an era of new devices built entirely by Google," says David Braun, the CEO of Capstone Strategic, a company that analyzes mergers. "Unfortunately, Moto X ... performed poorly in comparison to comparable devices. Google's failure with Motorola was partly due to issues with integrating Motorola with Google's existing hardware division and with the company as a whole."
HP and Palm: How Not To Merge
One of the most interesting combinations in tech, the HP acquisition of Palm in 2010 for $1.2 billion was intended to fuel the creation of new products, namely tablets and smartphones. (Back then, they were new.) King says HP failed to capitalize on the acquisition with outright incompetence, a lack of strategy, and poor execution.
Indeed, HP recently sold Palm's WebOS interface to LG, which plans to use the OS on televisions, and its Palm and iPaq patent to Qualcomm. Since then, HP has picked Microsoft, Chrome and Android as their platform of choice in products such as the HP Chromebook 14 and the HP Slate 21 Pro.
EMC and VMware: A Decade Later, Still a Strong Marriage
Another success for tech titan unification, this merger from 2003 for $635 million represents a good example of two companies with complementary product offerings (storage and virtualization, respectively) creating a stronger whole. A decade later, EMC's VMware buy proves two large successful companies can blend into one. "VMware fit in with EMC's desire to supply more than storage, and VMware's enterprise software has become a key means for EMC to maintain its relevance," Enderle says.
John Brandon is a former IT manager at a Fortune 100 company who now writes about technology. He has written more than 2,500 articles in the past 10 years. You can follow him on Twitter @jmbrandonbb. Follow everything from CIO.com on Twitter @CIOonline, Facebook, Google + and LinkedIn.
Read more about mergers/acquisitions in CIO's Mergers/Acquisitions Drilldown.
This story, "When Tech Titans Join Forces: The Verdict on 6 Big Mergers" was originally published by CIO.