How the Slack/Salesforce deal stacks up to history’s other Big Tech acquisitions

December 3, 2020, 2:00 AM UTC

When software giant Salesforce announced this week that it had acquired workforce collaboration company Slack, the sticker price—$27 billion—raised eyebrows. While the acquisition will help Salesforce take on Microsoft in the great battle for corporate customers, some will inevitably ask if the company overpaid.

To put the deal in perspective, it’s useful to compare the Salesforce/Slack deal to other Big Tech acquisitions from the past decade or so. Here’s a list of other notable mergers, drawn in part from this tweet by business reporter Jon Erlichman. Our roundup includes the inflation-adjusted price in parentheses, the year the deal took place, and a comment on whether the acquisition paid off.

IBM buys Red Hat for $34 billion in 2019 ($34.2 billion in today’s dollars)

This still stands as the largest software deal of all time and came as Big Blue confronted years of shrinking revenue and declining relevance. Buying Red Hat, a company known for an innovative open-source approach to computing, offered hope that IBM could shake up its stodgy culture and reclaim its reputation as a tech leader. For now, though, it’s too soon to say if the deal will pay off.

Amazon buys Whole Foods for $13.7 billion in 2017 ($14.6 B.)

Amazon, a master of newfangled commerce, entered the very old-fashioned business of groceries with its purchase of the upscale supermarket chain. So far, Amazon has struggled to wrest a profit from Whole Foods, and some see the grocery shops as an overall drag on the company’s business. The acquisition has, however, allowed Amazon to get its hooks deeper into Prime customers and to pick up know-how for its own retail stores.

Microsoft buys LinkedIn for $26.2 billion in 2016 ($28.4 B.)

This deal stands as the second biggest software acquisition of all time in real dollars. It also came as a reinvigorated Microsoft began a streak of torrid growth. The LinkedIn acquisition, then and now, has been seen as a way for Microsoft to entrench its dominance in business software and also muscle in on Salesforce’s client relationship tools.

Facebook buys WhatsApp for $19 billion in 2014 ($20.9 B.)

Some initially questioned why Facebook plunked a seemingly staggering sum to acquire a messaging app. In retrospect, the deal looks like a steal as WhatsApp has become a go-to tool for billions and, more recently, as Facebook lays plans to make it the cornerstone of an e-commerce empire.

Apple buys Beats for $3 billion in 2014 ($3.3 B.)

At the time, this headphones deal created huge buzz in the press as it combined the star power of Apple and music titan Dr. Dre. But in the following years, the deal never lived up to its hype as Beats faded as a brand while other headphones—including Apple’s own iPods—eclipsed it in popularity.

Microsoft buys Skype for $8.5 billion in 2011 ($9.8 B.)

Another major Microsoft acquisition—but one that never achieved its full potential. At the time of the deal, many saw Skype as the world’s leading video-chat platform. But in subsequent years, Microsoft appeared to let it languish. Today, it has been eclipsed by the likes of Zoom, Google Hangouts, and newer platforms like Discord.

Facebook buys Instagram for $1 billion in 2012 ($1.1 B.)

When the deal was announced, many were stunned that Facebook would plunk down a billion dollars for a company with 13 employees. CEO Mark Zuckerberg would have the last laugh, of course, as it’s now clear the deal was the bargain of the century.

Google buys YouTube for $1.65 billion in 2006 ($2.1 B.)

How would the world be different if YouTube had stayed independent? Today, Google’s purchase looks like another unbelievable bargain, but in 2006, YouTube was beset by legal problems and had an unclear future. That doesn’t change the fact that, in retrospect, this was another steal for the tech giant.

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