Worst tech mergers and acquisitions: Cisco and Linksys; Apple and Lala.com By ZDNet EditorsALERTS: Redundant link for Between the Lines | September 20, 2016 Original Source (Note: not all examples are provided in this document) Corporate mergers - like marriages - can result in the whole being stronger than its parts -- or they can end in utter disaster. The IT industry has suffered its share of disastrous marriages. We're counting down the worst of the worst... CISCO & LINKSYS Cisco entered the highly competitive small office and home office market back in 2003, by purchasing LINKSYS for $500M. Linksys, once the dominant player in the space has since been joined by NETGEAR, D- LINK, ASUS and numerous other vendors making nearly identical products, not to mention that many service providers and telcos have also issued their own integrated OEM Wi-Fi routers/residential gateways included as part of basic service offerings. Linksys as a result fell on hard times -- first being somewhat neglected by its parent company Cisco in the last several years, releasing extremely commoditized and less- reliable products. Various experimentation with "router design of the month" and heavy product overlap had produced a lousy generation of home routers by 2010, which required a complete re-design in 2011. Arguably this did improve the quality of LINKSYS's products. But it was too late. While LINKSYS did eventually solve its engineering issues, Cisco could not make the consumer products division profitable when compared to its enterprise networking equipment division. LINKSYS is now owned by Belkin, and has since been producing very good quality SOHO routers again, such as those which embrace the current 802.11ac "Wave 2" standard. APPLE & LALA With most of the company mergers listed in this piece, although many of them turned out horribly, you can at least say that the intentions of the company doing the https://www.zdnet.com/article/worst-tech-mergers-acquisitions-cisco-linksys-apple/ acquisition had the objective of actually integrating the assets of the company being acquired and making money with it. I mean, this is usually why you acquire another company, right? Apple bought music streaming service Lala.com back in December of 2009 for about $80M. If you recall, Lala was doing some innovative things around pricing and service offerings in the music streaming business, and our own Ed Bott picked it as his favorite among iTunes alternatives in his article written in April of 2009. Well, Lala was being so innovative that it scared the hell out of Apple, so the company simply killed it. No further development, no integration into iTunes, nada. While the financial impact of Lala's death is far smaller than any of the mergers and acquisitions listed in this rogue's gallery, it is by far the worst and most malicious case of corporate merger infanticide I have ever seen to date. Apple would late ...

1. Worst tech mergers and acquisitions: Cisco
and Linksys; Apple and Lala.com
By ZDNet EditorsALERTS: Redundant link for Between the
Lines | September 20, 2016
Original Source
(Note: not all examples are provided in this document)
Corporate mergers - like marriages - can result in the whole
being stronger than its
parts -- or they can end in utter disaster. The IT industry has
suffered its share of
disastrous marriages. We're counting down the worst of the
worst...
CISCO & LINKSYS
Cisco entered the highly competitive small office and home
office market back in 2003,
by purchasing LINKSYS for $500M.
Linksys, once the dominant player in the space has since been
joined by NETGEAR, D-
LINK, ASUS and numerous other vendors making nearly
identical products, not to
mention that many service providers and telcos have also issued
their own integrated
OEM Wi-Fi routers/residential gateways included as part of

2. basic service offerings.
Linksys as a result fell on hard times -- first being somewhat
neglected by its parent
company Cisco in the last several years, releasing extremely
commoditized and less-
reliable products.
Various experimentation with "router design of the month" and
heavy product overlap
had produced a lousy generation of home routers by 2010,
which required a complete
re-design in 2011. Arguably this did improve the quality of
LINKSYS's products. But it
was too late.
While LINKSYS did eventually solve its engineering issues,
Cisco could not make the
consumer products division profitable when compared to its
enterprise networking
equipment division.
LINKSYS is now owned by Belkin, and has since been
producing very good quality
SOHO routers again, such as those which embrace the current
802.11ac "Wave 2"
standard.
APPLE & LALA
With most of the company mergers listed in this piece, although
many of them turned
out horribly, you can at least say that the intentions of the
company doing the
https://www.zdnet.com/article/worst-tech-mergers-acquisitions-

3. cisco-linksys-apple/
acquisition had the objective of actually integrating the assets
of the company being
acquired and making money with it.
I mean, this is usually why you acquire another company, right?
Apple bought music streaming service Lala.com back in
December of 2009 for about
$80M. If you recall, Lala was doing some innovative things
around pricing and service
offerings in the music streaming business, and our own Ed Bott
picked it as his favorite
among iTunes alternatives in his article written in April of
2009.
Well, Lala was being so innovative that it scared the hell out of
Apple, so the company
simply killed it.
No further development, no integration into iTunes, nada.
While the financial impact of Lala's death is far smaller than
any of the mergers and
acquisitions listed in this rogue's gallery, it is by far the worst
and most malicious case of
corporate merger infanticide I have ever seen to date.
Apple would later purchase Beats Audio for $3B, and would
integrate its streaming
music service into Apple Music, which is now part of iTunes.
Only the future will tell if
that acquisition will be less of a case of pure infanticide than
that of Lala's.

4. FACEBOOK & INSTAGRAM
While not anywhere near on the "WTF" scale as Zynga's or HP's
acquisition blunders in
the last year, the $1B acquisition of the photo sharing service
by Facebook is still
somewhat questionable and it remains to be seen if the merger
ends up being a
successful one.
On the surface it seems that Facebook entering the photo
sharing space was a good
idea, but whether they needed to spend a billion dollars to do
something they probably
could have coded in-house for far, far less money and gotten
probably instantaneous
market share on is another matter entirely.
Years after the acquisition, Instagram is still a separate app
download from the main
Facebook app on both the iOS and Android platform, and the
sharing of the photos on
user timelines is anything but seamless, so the integration of the
company's assets
have been questionable.
But code integration isn't the worst of this merger's problems.
Facebook has in recent
years lost its API integration with Twitter, which has enraged
many of Instagram's core
user base that actively uses both services. Kerfuffles over
Instagram's terms of service
and photo usage rights by Facebook haven't helped the
company's image either.

5. MYSPACE & NEWS CORP.
Founded in 2003, Myspace was once the most popular social
networking web site in the
world, and in June of 2006, the company surpassed even Google
as the most visited
website in the United States. In August of 2006, the site had
reached over 100 million
account activations.
In 2005, the company was purchased by Rupert Murdoch's News
Corporation for
$580M. When the company was at its peak in 2007, Myspace
had a market
capitalization of about $12B.
In 2008, the company's fortunes began to go into a steep
decline. Rather than
improving their social networking experience the company
chose to go with a "portal-
style" strategy for building its audience around music and
entertainment instead.
Additional modifications to the site in the hopes of increasing
the company's
advertisement revenue also made it unwieldy and slow to use.
To make matters worse, the company's main rival, Facebook,
was eclipsing it in traffic
with its clean and efficient site design, increased number of
users and was building a
platform where 3rd-party developers could plug into an API to
build new applications for
it. By contrast, Myspace was doing all of its development in-

6. house.
In June 29, 2011, Myspace was sold to Specific Media and pop
star Justin Timberlake
for approximately $35 million, a far cry from the $12B
valuation it had only four years
previous.
MICROSOFT & DANGER, INC.
Danger Inc, formed in the year 2000 by executives from Apple,
WebTV and Philips was
a company that specialized in software and services for mobile
computing devices. The
company was best known for a mobile smartphone/messaging
device called the T-
Mobile Sidekick, which was also branded as the Danger Hiptop.
In 2008, Microsoft purchased the company for an undisclosed
amount, but the price
was rumored to be around $500 million. Post acquisition, the
employees were all
absorbed into Microsoft's Mobile Communications Business
(MCB) where they went to
work on a future mobile phone platform.
While this future device development was underway, in October
2009, Danger incurred
a catastrophic data loss resulting in complete business
continuity failure at one of its
data centers. This data center was hosting personal customer
data used by the T-
Mobile Sidekick product that eventually took two months to
recover from.
The highly publicized fiasco undermined consumer confidence

7. in the product, and it
resulted in T-Mobile canceling the Sidekick in the summer of
2010.
CISCO & LINKSYSAPPLE & LALAFACEBOOK &
INSTAGRAMMYSPACE & NEWS CORP.MICROSOFT &
DANGER, INC.
1. A firm has consistently adjusted its allowance account at the
end of the fiscal year by adding a fixed percent of the period's
sales on account. After seven years, the balance in Allowance
for Doubtful Accounts has become very large in relationship to
the balance in Accounts Receivable. Give two possible
explanations.
2. Growth is an important part of building a successful business.
However, sometimes growth strategies don't work. In this
forum, you will analyze a failed merger/acquisition. Here's
an interesting article from ZDNet that should give you several
examples to explore in greater depth. Here's another resource
https://www.rasmussen.edu/degrees/business/blog/best-and-
worst-corporate-mergers/as well.
After selecting and researching a failed merger/acquisition, post
a summary of the deal and what went wrong. Also, think about
the following when formulating your responses:
· What was the innovation? Is that where the failure occurred?
· Would any tools we've learned so far, such as the Customer
Centered Job Map, have helped?
Then, state if you think the merger/acquisition could have been
successful if the circumstances were different. Describe
anything you've learned in this class that might have improved
the situation. Be sure to explain your rationale, and use course
materials as references. Remember to cite your references. The
summary should be at least 200 words.
After posting your summary, read at least two other summaries
posted by students. For your response, post your thoughts on

8. what could have been changed or influenced that might have
improved the outcome of the failed merger/acquisition. Or if
you don't think anything would have helped, state why.