Apple's voracious appetite for acquisitions outspent Google in 2013

2

Comments

  • Reply 21 of 42
    correctionscorrections Posts: 1,363member
    Quote:

    Originally Posted by wakefinance View Post

     

     

    Thanks, I was going to chime in about his miscategorization of the expenses.


     

    You know, even if you try to say that Apple’s cap ex invested to "acquire talent, technology and production capacity" isn’t something you want to talk about, you still have to admit that Apple’s "$1.61 billion for 'business acquisitions' and 'acquisition of intangible assets'" in 2013 was larger than Google’s "$1.45 billion for acquisitions and 'purchases of intangibles and other assets.'"

     

    That is, if cws and the other eagle eyed "financial expert" critics can understand the concept of two figures where one is larger than the other.  

     

    That’s a difference of $161 million. So if you want to keep arguing that the premise of the article is wrong, all I can suggest is that you go back to the second grade and pick up some really remedial math skills. 

  • Reply 22 of 42
    correctionscorrections Posts: 1,363member
    Quote:
    Originally Posted by PhilBoogie View Post





    Supposedly Google never bid on WA. Furthermore, the MM deal also gave them $3B in cash among other valuables making the acquisition anything but $8B down. I'm sure @Gatorguy knows more. Plus he has links!

     

    Google fans really like to describe Motorola Mobility as anything other than a huge mistake, but they’re forgetting that not only did Motorola burn through more of Google’s cash in less than two years than the Beleaguered Apple lost through the entire decade of the 1990s, but that acquiring Motorola at the delusional whim of Andy Rubin also resulted in significant other operational costs (+$100 million dollars every quarter in write-offs) and INCREDIBLE opportunity costs. 

     

    Imagine if Google had invested its $12.5 billion in something that hadn’t lost money for two years and wasted significant and material efforts in executive / operational management; product design and research ("emptying the pipe" for a year and a half while building new products that nobody bought); and large legal expenses in trying to monetize those worthless patents in a massive crapshoot that lost big across the board.

     

    People complain about Apple sitting on billions that earn conservative interest returns, but Google not only failed to earn any return on more than 1/4 of its available cash but actually lost lots of money. 

     

    No amount of apologetic fandroidism can spin the facts to say anything other than that the acquisition of Motorola was a vast waste of time, money and potential that helped set Google back for two years. And nothing says that better than a comparison of Apple’s iPhone and iPad ecosystem, progressive iOS development and unit profitability compared with Android’s stagnant ecosystem, comatose platform development (witness Android 4.4 KitKat) and its inability to sell hardware even at break even, necessitating desperate price slashing

  • Reply 23 of 42
    You know, even if you try to say that Apple’s cap ex invested to "acquire talent, technology and production capacity" isn’t something you want to talk about, you still have to admit that Apple’s "$1.61 billion for 'business acquisitions' and 'acquisition of intangible assets'" in 2013 was larger than Google’s "$1.45 billion for acquisitions and 'purchases of intangibles and other assets.'"

    That is, if cws and the other eagle eyed "financial expert" critics can understand the concept of two figures where one is larger than the other.  

    That’s a difference of $161 million. So if you want to keep arguing that the premise of the article is wrong, all I can suggest is that you go back to the second grade and pick up some really remedial math skills. 

    No doubt Apple's figure exceeds Google's, but when the article is about acquisitions and pulls evidence from financial statements, I expect “acquisitions” to be used in the financial sense of mergers and acquisitions.
  • Reply 24 of 42
    pdq2pdq2 Posts: 270member
    Quote:

    Originally Posted by umumum View Post

     

    btw google didn't drop $8b on motorola, it had already sold the home unit for $2.4b, the details of the lenovo sale aren't publicm ,, and there're rumours that through the usual exotic application of tax law so beloved of google, apple and others, it might end up much closer to break even whilst having acquired a nice patent portfolio


     

    I'm not sure why folks are saying the details of the MM sale to Lenovo aren't public- for instance, the Verge says it sold for $2.9B (not $4B) - maybe some of the smaller details are still private.

     

    Starting with $12.3B, and adding $2.3B in losses makes the starting tab for Google $14.6B. Minus the set-top box unit for under $2.4B and the MM deal for $2.9B leaves GOOG still $9.3B in the red for the retained patents that Lenovo didn't take, which so far haven't brought in any licensing money (that I'm aware of) or won any lawsuits.

     

    Which leaves them with tax write-offs. I don't know what those are worth, but I believe they're based on previous MM losses; a couple more disastrous deals like this, and Google should be rolling in money.

  • Reply 25 of 42
    constable odoconstable odo Posts: 1,041member
    Quote:

    Originally Posted by zoffdino View Post

     

    Apple can't win in the M&A dollar game. Facebook just spent $19B for WhatApp, while Google's losing bid was rumored to be in the $10B range. A few years back, Google threw $12B for Motorola and just sold it for $4B to Lenovo, essentially $8B down the drain with little to show.

     

    But it's a silly competition. I don't know how Facebook is going to monetize WhatApp to the tune of $19B, or how Google benefited from the Motorola acquisition except for patents. I like Apple's model of buying small, innovative companies like AuthenTec or Siri and deliver features that competitors rush to copy (hello Samsung, you motherfucker!).


    What do you mean by Google has little to show?  A couple of years ago both Apple and Google had similar share prices.  Google is now at a mighty $1200 a share and Apple is at a measly $520 a share.  I'd say shareholders got more value out of Google than they did out of Apple.  Apple's cheap nickel and dime acquisitions will never get investors excited as a company getting blockbuster acquisitions.  Google has left Apple in the dust as far as Wall Street is concerned.

  • Reply 26 of 42
    philboogiephilboogie Posts: 7,438member
    Google fans really like to describe Motorola Mobility as anything other than a huge mistake, but they’re forgetting that not only did Motorola burn through more of Google’s cash in less than two years than the Beleaguered Apple lost through the entire decade of the 1990s, but that acquiring Motorola at the delusional whim of Andy Rubin also resulted in significant other operational costs (+$100 million dollars every quarter in write-offs) and INCREDIBLE opportunity costs. 

    Imagine if Google had invested its $12.5 billion in something that hadn’t lost money for two years and wasted significant and material efforts in executive / operational management; product design and research ("emptying the pipe" for a year and a half while building new products that nobody bought); and large legal expenses in trying to monetize those worthless patents in a massive crapshoot that lost big across the board.

    People complain about Apple sitting on billions that earn conservative interest returns, but Google not only failed to earn any return on more than 1/4 of its available cash but actually lost lots of money. 

    No amount of apologetic fandroidism can spin the facts to say anything other than that the acquisition of Motorola was a vast waste of time, money and potential that helped set Google back for two years. And nothing says that better than a comparison of Apple’s iPhone and iPad ecosystem, progressive iOS development and unit profitability compared with Android’s stagnant ecosystem, comatose platform development (witness Android 4.4 KitKat) and its inability to sell hardware even at break even, necessitating desperate price slashing

    I figured as much, but are they burning through their money? Is there an empty barrel in sight? Or are they making so much a single (or plural) MM acquisition doesn't hurt them over time? YouTube must also cost them more than bringing in cash, though it's probably difficult to segregate the revenue on this.

    I read that Page wanted MM because he liked the clamshell phone back in the day. Any other old stuff he is fond of? Any useless acquisitions on the horizon?

    'comatose platform' - nice
  • Reply 27 of 42
    dasanman69dasanman69 Posts: 12,980member
    Google fans really like to describe Motorola Mobility as anything other than a huge mistake, but they’re forgetting that not only did Motorola burn through more of Google’s cash in less than two years than the Beleaguered Apple lost through the entire decade of the 1990s, but that acquiring Motorola at the delusional whim of Andy Rubin also resulted in significant other operational costs (+$100 million dollars every quarter in write-offs) and INCREDIBLE opportunity costs. 

    Imagine if Google had invested its $12.5 billion in something that hadn’t lost money for two years and wasted significant and material efforts in executive / operational management; product design and research ("emptying the pipe" for a year and a half while building new products that nobody bought); and large legal expenses in trying to monetize those worthless patents in a massive crapshoot that lost big across the board.

    People complain about Apple sitting on billions that earn conservative interest returns, but Google not only failed to earn any return on more than 1/4 of its available cash but actually lost lots of money. 

    No amount of apologetic fandroidism can spin the facts to say anything other than that the acquisition of Motorola was a vast waste of time, money and potential that helped set Google back for two years. And nothing says that better than a comparison of Apple’s iPhone and iPad ecosystem, progressive iOS development and unit profitability compared with Android’s stagnant ecosystem, comatose platform development (witness Android 4.4 KitKat) and its inability to sell hardware even at break even, necessitating desperate price slashing

    While you're absolutely correct, Google has no one to blame but Google. The purchase of MM didn't have to turn out the way it did. To me it seems like that they didn't put much thought into it and lacked a game plan, that is what was the mistake. No vision, no direction.

    Seeing as how they fumbled the ball on this, one can't confidently say that they would've done anything better with $12.5 billion.
  • Reply 28 of 42
    I am curious why this article didn't include Microsoft, Facebook, or hardware manufacturers like HP and Samsung as well. Apple and Google only compete in one area. It's overly simplistic to present an Apple-vs-Google face off. And what's the value in comparing dollars spent on acquisitions? Is it even a meaningful metric?
  • Reply 29 of 42
    philboogiephilboogie Posts: 7,438member
    A couple of years ago both Apple and Google had similar share prices.  Google is now at a mighty $1200 a share and Apple is at a measly $520 a share.  I'd say shareholders got more value out of Google than they did out of Apple.  Apple's cheap nickel and dime acquisitions will never get investors excited as a company getting blockbuster acquisitions.  Google has left Apple in the dust as far as Wall Street is concerned.

    Don't tell me you're still here, reading up on tech news while you linger on the stock market, thinking there is any correlation between the two.
    Don't tell me you held on to AAPL and didn't buy GOOG.
    Don't tell me you missed the sign:

    700
  • Reply 30 of 42
    correctionscorrections Posts: 1,363member
    Quote:

    Originally Posted by Constable Odo View Post

     

    What do you mean by Google has little to show?  A couple of years ago both Apple and Google had similar share prices.  Google is now at a mighty $1200 a share and Apple is at a measly $520 a share.  I'd say shareholders got more value out of Google than they did out of Apple.  Apple's cheap nickel and dime acquisitions will never get investors excited as a company getting blockbuster acquisitions.  Google has left Apple in the dust as far as Wall Street is concerned.


     

    Yes if you are day trading, you can take advantage of irrational lapses in the market to make money. But fooling investors has little to do with the fundamental performance of AAPL and GOOG. 

     

    Apple would not have better fundamentals were it to make extraordinary, foolish big ticket acquisitions. Consider AOL, HP/Compaq, HP/Palm, and so on. You can fool people with smoke and mirrors, or you can build for the future. Google’s sideshow around MM may have helped its share price in the short term, but it didn’t make the company stronger, more profitable, or better positioned in any sort of strategic way.

     

    If you want Apple to buy up big stupid companies and lay off their people and then spin the remains off as scrap, you shouldn’t be investing in AAPL. You should be investing in Microsoft. How has that worked out long term?

  • Reply 31 of 42
    correctionscorrections Posts: 1,363member
    Quote:

    Originally Posted by Suddenly Newton View Post



    I am curious why this article didn't include Microsoft, Facebook, or hardware manufacturers like HP and Samsung as well. Apple and Google only compete in one area. It's overly simplistic to present an Apple-vs-Google face off. And what's the value in comparing dollars spent on acquisitions? Is it even a meaningful metric?

     

    Why don’t you compile the numbers, analyze them and submit your findings for us?

  • Reply 32 of 42
    correctionscorrections Posts: 1,363member
    Quote:

    Originally Posted by wakefinance View Post





    No doubt Apple's figure exceeds Google's, but when the article is about acquisitions and pulls evidence from financial statements, I expect “acquisitions” to be used in the financial sense of mergers and acquisitions.

     

    The article isn’t trying to make a meaningless comparison of numbers in a pointless dick-measuring contest for fan advocacy reasons. 

     

    It’s trying to present factual refutation of the widely held notion that Apple isn’t spending money and isn’t investing in acquiring outside talent. Typical M&A isn’t the only way to do that, as it points out. Apple is acquiring production capacity and talent faster in both respects than Google, the company people most often think of as having a liberal acquisiton strategy.

     

    Quibbling at the presentation and complaining that you didn’t understand what it was saying at first glance due to your own fixed mindset doesn’t change the facts. Apple’s voracious appetite for acquisitions did indeed outspend even Google in 2013.

     

    But more importantly, as the article works to explain, Apple’s acquisitions are not only greater in size and total cost this year, but also appear to be smarter and part of a real strategy, rather than Google’s "spend money like a nouveau riche brat and lose it all because you still have an income" history, evidenced by all the acquisitions that went into failed initiatives that often went nowhere. 

  • Reply 33 of 42
    gatorguygatorguy Posts: 20,748member
    But more importantly, as the article works to explain, Apple’s acquisitions are not only greater in size and total cost this year, but also appear to be smarter and part of a real strategy, rather than Google’s "spend money like a nouveau riche brat...

    I agreed with pretty much everything in that post except for this. Since you neither you nor I nor anyone outside of Apple knows what mystery companies were purchased in the past few months and how much was paid for each I don't think it's reasonable to claim those purchases were smarter or part of a real strategy unlike Google's.
  • Reply 34 of 42
    elrothelroth Posts: 1,201member
    Quote:

    Originally Posted by umumum View Post

     

     

    yep, silly is the word, buying companies can be good or bad, it's down to how good the acquirer is at assimilation, rationalization and exploitation, i've seen some real screw ups from the inside, thankfully from the "i told you so" position, simply looking at how many or how much is pointless

     

    btw google didn't drop $8b on motorola, it had already sold the home unit for $2.4b, the details of the lenovo sale aren't publicm ,, and there're rumours that through the usual exotic application of tax law so beloved of google, apple and others, it might end up much closer to break even whilst having acquired a nice patent portfolio


    Google also lost a few billion dollars running Motorola for a few years. When you look at the entire deal, Google immediately sold off one part of Motorola for 2-3 billion (if I remember correctly), lost a few billion running Motorola, sold the rest of the hardware (plus some patents I think), and kept most of the patents. The patents have been worthless so far - they tried to use some of them to sue Apple, but they lost (the patents were standards-essential patents). I would say Google is probably down about $4 billion on the deal - I've seen that estimate somewhere. Can't say for sure, though.

  • Reply 35 of 42
    The article isn’t trying to make a meaningless comparison of numbers in a pointless dick-measuring contest for fan advocacy reasons. 

    It’s trying to present factual refutation of the widely held notion that Apple isn’t spending money and isn’t investing in acquiring outside talent. Typical M&A isn’t the only way to do that, as it points out. Apple is acquiring production capacity and talent faster in both respects than Google, the company people most often think of as having a liberal acquisiton strategy.

    Quibbling at the presentation and complaining that you didn’t understand what it was saying at first glance due to your own fixed mindset doesn’t change the facts. Apple’s voracious appetite for acquisitions did indeed outspend even Google in 2013.

    But more importantly, as the article works to explain, Apple’s acquisitions are not only greater in size and total cost this year, but also appear to be smarter and part of a real strategy, rather than Google’s "spend money like a nouveau riche brat and lose it all because you still have an income" history, evidenced by all the acquisitions that went into failed initiatives that often went nowhere. 

    I think it's hilarious that you say the article wasn't a pointless fanboy dick measuring contest when that's all it was. You compared numbers in an attempt to spin things for Apple and against Google. That is fanboy dick measuring at its finest.

    Any time a company acquires assets, it expects those assets to provide a benefit, but “making acquisitions” refers to something very specific from a business perspective and has a different impact than the addition of property and equipment. You want to refute the notion that Google is making more acquisitions than Apple. That notion is based on the fact that Google acquired more companies at higher values than Apple did. You can't refute that by saying that Apple made more investments in physical property.

    Trust me when I tell you that I have no comprehension issues regarding the content of your article. The issues are all yours. Simply writing several cogent paragraphs to promote your fanboy perspective doesn't make a compelling argument to someone who knows more than you do about the subject matter. It's possible to make perfect sense within a particular frame of reference but have absolutely no connection to reality. You do that on a regular basis.

    I can't affirm our deny the relative strategic advantage of Apple's and Google's acquisitions of other companies. These companies have long term plans about which we can only speculate. It will take a long time to find out who has a better strategy, but if I had to choose one company or the other, I would choose Google. They seem more willing to diversify their investments and research initiatives, which is why the stock market seems to favor Google. Diversification of income streams leads to lower income volatility, and although Google currently relies heavily on advertising, it appears that the future may be quite different.
  • Reply 36 of 42
    Why don’t you compile the numbers, analyze them and submit your findings for us?

    Don't take it so personally. After all, you didn't write the article.
  • Reply 37 of 42
    Yes if you are day trading, you can take advantage of irrational lapses in the market to make money. But fooling investors has little to do with the fundamental performance of AAPL and GOOG. 

    I would not consider two or three years' performance irational lapses in the market, or short term. During the past two years Aapl stock is at almost the same price (about $525) with a ride up to $700 and a fall down to $385 along the way. Google stock was around $600 two years ago and is now $1200. If you bought and held each, one of them doubled and the other made you a few diividend dollars.

    Going back to the Google purchase of MM things are a,little better for Apple, but even moreso for Google. IIRC it was announced in mid August 2011? Back then AAPL was about $350 and has now gone to $525. Back then GOOG was about $500 and is now $1200. And no giant swing like with Apple stock either. It may not be the better company, but since the MM purchase at least it has been by far the better investment.



    If you go back two more years, however, Google was stuck in a rut, while Apple was the stock on fire (doubling in price). In the two years preceding the MM announcement Google stock hardly moved at all, from about $450 to $500. After the MM announcement wall street seems to have had a change of heart about the stock. My hope is that Apple sees a similar trend in their stock price after their two "lost" years, but from a better catalyst. Or better yet several catalysts.
  • Reply 38 of 42
    Thanks for this article Daniel. Under-the-radar events usually don't get press, but this was interesting.
  • Reply 39 of 42
    Quote:

    Originally Posted by Corrections View Post

     

     

    Google fans really like to describe Motorola Mobility as anything other than a huge mistake, but they’re forgetting that not only did Motorola burn through more of Google’s cash in less than two years than the Beleaguered Apple lost through the entire decade of the 1990s, but that acquiring Motorola at the delusional whim of Andy Rubin also resulted in significant other operational costs (+$100 million dollars every quarter in write-offs) and INCREDIBLE opportunity costs. 

     

    Imagine if Google had invested its $12.5 billion in something that hadn’t lost money for two years and wasted significant and material efforts in executive / operational management; product design and research ("emptying the pipe" for a year and a half while building new products that nobody bought); and large legal expenses in trying to monetize those worthless patents in a massive crapshoot that lost big across the board.

     

    People complain about Apple sitting on billions that earn conservative interest returns, but Google not only failed to earn any return on more than 1/4 of its available cash but actually lost lots of money. 

     

    No amount of apologetic fandroidism can spin the facts to say anything other than that the acquisition of Motorola was a vast waste of time, money and potential that helped set Google back for two years. And nothing says that better than a comparison of Apple’s iPhone and iPad ecosystem, progressive iOS development and unit profitability compared with Android’s stagnant ecosystem, comatose platform development (witness Android 4.4 KitKat) and its inability to sell hardware even at break even, necessitating desperate price slashing


    Quite. And just imagine what any company that is approached by Google is now going to think. Am I going to get chewed up and spit out in two year's time? To my mind, the Motorola debacle reveals a vacuum right at the heart of Google strategy. 

  • Reply 40 of 42
    Quote:

    Originally Posted by wakefinance View Post





    I think it's hilarious that you say the article wasn't a pointless fanboy dick measuring contest when that's all it was. You compared numbers in an attempt to spin things for Apple and against Google. That is fanboy dick measuring at its finest.



    Any time a company acquires assets, it expects those assets to provide a benefit, but “making acquisitions” refers to something very specific from a business perspective and has a different impact than the addition of property and equipment. You want to refute the notion that Google is making more acquisitions than Apple. That notion is based on the fact that Google acquired more companies at higher values than Apple did. You can't refute that by saying that Apple made more investments in physical property.



    Trust me when I tell you that I have no comprehension issues regarding the content of your article. The issues are all yours. Simply writing several cogent paragraphs to promote your fanboy perspective doesn't make a compelling argument to someone who knows more than you do about the subject matter. It's possible to make perfect sense within a particular frame of reference but have absolutely no connection to reality. You do that on a regular basis.



    I can't affirm our deny the relative strategic advantage of Apple's and Google's acquisitions of other companies. These companies have long term plans about which we can only speculate. It will take a long time to find out who has a better strategy, but if I had to choose one company or the other, I would choose Google. They seem more willing to diversify their investments and research initiatives, which is why the stock market seems to favor Google. Diversification of income streams leads to lower income volatility, and although Google currently relies heavily on advertising, it appears that the future may be quite different.



    PS - Try not to sound like such a dick.

    You seem to have a thing about dicks.

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