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Global technology M&A update - 1Q11 highlights - Social networking drives global technology M&A transactions - EY - Global

Global technology M&A updateSocial networking drives global technology M&A transactions

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“Social networking is becoming more broadly accepted, and is beginning to be incorporated into many business models across multiple industries …”

 
  Joe
Steger
  Global Transaction Advisory Services Technology Industry Leader, Ernst & Young

Deals aimed at marketing and monetizing social networks on mobile platforms

Social networking continues to stimulate global technology merger and acquisition (M&A) transactions in 2011, particularly for companies looking to integrate social functions into their enterprise applications or advertising/marketing technology platforms.

The software sector's biggest-ticket disclosed-value deal in the first quarter of 2011 involved a software as a service (SaaS)-based customer relationship management (CRM) vendor's pending acquisition of a maker of social media monitoring software. That SaaS-company has a stated goal of expanding its applications by integrating various social networking functions — and it was not alone in pursuing transactions for that purpose.

The first quarter of 2011 also saw the continued convergence of social and mobile, with multiple deals aimed at marketing and monetizing social networks on mobile platforms.

Highlights of global technology deal making involving social networking sellers in 1Q 2011 included:

  • Many e-commerce and online advertising/marketing deals involved "deal-a-day" group discount sites, often referred to as social e-commerce.
  • Advertising/marketing deals also often involved technology designed to make marketing more effective through the integration of social networking functions. Deals occurred around two types of technologies: analytical technologies (such as the social media monitoring acquisition in the largest dollar-value deal mentioned above) and technologies that enable marketers to make more efficient use of social networks.
  • 1Q 2011 saw the continued convergence of social and mobile, with deals including three mobile-related acquisitions by one major social networking company. The technology acquired included "hyper local" mobile advertising, mobile application development and mobile group messaging.

We counted roughly 50 social networking-related deals in all, the vast majority of which were small in value.

“Social networking is becoming more broadly accepted, and is beginning to be incorporated into many business models across multiple industries,” says Joe Steger, Global Technology Transaction Advisory Services Leader. “That should translate into continued growth in M&A around social networking. But businesses adopting social network platforms should also be aware that integration and initial productivity issues may arise as they work to align social networking technologies with existing applications, processes and culture.”

Our Global technology M&A update, January–March 2011 is a comprehensive report on the industry’s transaction activity in the quarter. It provides in-depth analysis of the quarter’s statistical results and deeper dives into the above trends.  

Executive bytes is a related and ongoing series where we take a closer look at what’s happening in specific segments of the technology industry.










Global technology M&A update


The first quarter started strong for global technology M&A. As technology innovations steer society toward a “smart world,” we anticipate a good year. Learn more about today’s trends.

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