M&A report: Yahoo leads for 2013

Of all the big tech companies that bought other, smaller tech companies last year, Yahoo by far was the star.

Yahoo acquired 22 companies in 2013, shelling out a whopping $1.2 billion for engineering talent and new technology as the company continues its comeback from near dot-com bust. Yahoo was part of a small but strong contingent of companies that drove up the total amount spent on acquiring private U.S. companies for 2013, according to a new report by research and financial firm PrivCo.

Although the total number of acquisitions was down compared to 2012 — 1,636 compared to 2,357 — the total dollars spent on acquiring U.S. private tech companies was up 34 percent. Last year, there were $111.8 billion in disclosed transactions, up from $83.5 billion the year before, according to the report. The first quarter of 2013 had the most acquisitions, although the third quarter saw the most dollars spent on acquisitions.

Behind Yaho0 was Google, with 19 acquisitions for $1.19 billion; Autodesk, with 11 deals for $246 million; Facebook, with 10 deals for $235 million (this report does not include the $19 billion WhatsApp purchase); and Apple paid $595 million for nine acquisitions.

They were followed by Cisco, Twitter and Groupon. Silicon Valley teach companies occupied seven of the top-ten spots for most acquisitions.

Yahoo’s acquisition activity is particularly head-turning because the company didn’t even rank in the top-50 for acquisitions in 2012, the year CEO Marissa Mayer took over. Since then, Mayer has been on a shopping spree, with notable acquisitions such as Tumblr in a $1.1 billion deal, and Qwiki, an iOS app that helps users create movies out of the photos and videos in their camera roll, for an estimated $50 million.

On an earnings call with investors last year, Mayer described Yahoo’s acquisition strategy.

“There’s basically three different types of acquisitions that we do. We do smaller, talent acquisitions where we tend to tuck those teams in. Those have largely been in the mobile area. We also make small strategic acquisitions. I would put Aviate, for example, in that bucket. I would also put Summly, which ultimately powered both our Yahoo app, as well as the new Yahoo news digest app. And then finally we have some acquisitions that are really fundamental building blocks, which is Tumblr. It allows us to tap into a new demographic, it allows us to really participate in new growth engines like social, and it’s really fundamentally becoming a key part of our overall technological offering …”

Photo: Marissa Mayer, president and chief executive officer of Yahoo! Inc., delivers a keynote speech during a news conference at the 2014 Consumer Electronics Show (CES) in Las Vegas, Nevada, U.S., on Tuesday, Jan. 7, 2014. David Paul Morris/Bloomberg 

Heather Somerville Heather Somerville (225 Posts)

Heather Somerville is a business reporter covering venture capital and startups for the Bay Area News Group.