Have Great IP? The Big Fish Will Pay You a Fortune

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Ever since the 1990s, mergers and acquisitions (more commonly called M&As) have been on a roll. Be it boom time or bust, M&As have always been at the helm of business affairs. And an interesting aspect of this business activity is that a majority of M&As were based entirely on the acquirer’s desire to obtain the target’s intellectual property assets. One look at circa 2000 shows that nearly 40% of the $10 trillion American economy was garnered by M&As.

These M&As were not just restricted to massive multinationals, but were significantly practiced by small and mid-sized business that have been going out and out to add significant value not just to their financial assets, but also their intangible assets.

Google Grows

In 2011, Google’s $12.5 billion offer to purchase Motorola Mobility found the search engine giant justifying its staggering purchase price to acuqire the treasure trove of patents. The deal found the mobilephone company earning nothing less than a 63% premium. This seismic event found the value of mergers and acquisitions skyrocketing, with an ever increasing valuation of patents.

Well, Google didn’t just stop with its efforts to buy Motorola Mobility, but set off the same year to acquire Waze, an Israel-based social mapping location data start-up. Google is said to have acquired Waze and it’s patent portfolio for about $1 billion. With Google buying Waze’s intellectual property, Nokia stepped in to tighten the screws on Google and get the search engine giant to purchase licenses on some of its mapping patents that might find a few of Waze’s patents infringing upon. These are possibly patent number 7,628,704, its extension 8,070,608 and 7,092,964.

Microsoft’s enterprising face

The enterprise-twin of Facebook,  Yammer found itself earning a $1.2 billion price tag in 2012, with Microsoft purchasing it off the block. California-based Microsoft valued Yammer’s intellectual property alone at $178 million. But this barely comes as a surprise with Microsoft paying a whopping $8.6 billion for Skype in 2011, valuing the internet phone service provider’s IP at $1.6 billion! Microsoft’s acquisitions skyrocketed in 2013 when it paid a massive €3.79 billion to purchase the devices and services business of Nokia, including its key patents.

Facebook & Yahoo in a social melee

Social media companies are going out and out to make their presence felt strong and long. Earlier this year, mobile messaging service Yammer enjoined its business with Facebook for nothing less than $20 billion.

Facebook’s purchase of photo-sharing service provider Instagram in 2012 was splashed all over the papers, albeit for the wrong reasons. There was a scare that following this billion-dollar deal, Instagram users would lose their copyright over their pictures. Well, Facebook sent out assurances with new policies to hold onto its user base, and Instagram made hay while the sun shone. This deal came through as a one-up for Facebook in further blowing out the light of Yahoo’s Flickr-ing candle. However, Yahoo’s attempt to stay visible in the virtually social world found it purchasing Tumblr off the block for $1.1 billion in 2013.

While these have been the newsy major acquisitions of companies with strong patent portfolios, the below graph charts some of the other top acquisitions made in 2013-14:


Source: iRunway analysis

(Featured image source: https://en.wikipedia.org/wiki/Wikipedia:Wikipedia_Signpost/2015-11-25/News_and_notes)

Deepak Sirwani
Deepak Sirwani

Deepak knows the art of monetizing patents and he showcases their value to the world. And if there is a patented technology that can change the world dramatically, you’ll find a mention in his blogs.

Annie Sailo
Annie Sailo

Analyze – that’s the catch word for Annie. From analyzing personalities to every aspect of the intellectual property industry, her blogs offer a comprehensive view on the patent world.

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