Tech acquisitions are a way of life with hundreds happening in 2017, but occasionally they really jump out at you for a variety of reasons. One such merger is the recently announced Apple purchase of Shazam for $400m according to TechCrunch.
When Facebook purchased Instagram for $1bn back in 2012 I remember feeling surprised, maybe even scoffing a little. What could Facebook (a site that at this point wasn’t making much advertising dollars itself) do with this little (30m users at that point), young (18-month old) and loss-making social network? It felt as though they were buying out a rival, rather than acquiring a money-maker. Half a decade on and would you believe it – Zuckerberg and co. were right. That little social network now has over 600m users globally and as an agency we are spending with them and seeing good results. I have no doubt that it is proving a fantastic investment or even (whisper it quietly) a bargain.
Five years later and I write more learned, and less shocked that the Apple/Shazam deal is going through. My only concern here is that Shazam isn’t little, young or loss-making. It has had a while to become mainstream and successful, and one could argue that it has failed to do that. But I don’t think this purchase is about having a complete Ferrari in your garage. I think it’s more to afford the Apple mechanics, the opportunity to get under the bonnet, take the sports car engine that has been fine-tuned across years of development, and move it into the Apple chassis – aka the iPhone and other flagship products.
That’s the great thing about Apple and Facebook though: they can afford these ‘gambles’ even if they don’t always pay off. Have you ever heard of the Apple/NetSelector acquisition? I feel by 2022, they will have done a whole lot more with Shazam than they ever did with NetSelector – but can they turn it into a real money-spinner like Instagram has done over the past 5 years? My prediction is a yes, with one caveat being that they’ll use the tech over the brand. It’s Shazam Jim, but not as we know it.
Martin Doyle, Head of Digital