The Most Fascinating Deals of 2010
Tesla Goes Public Groupon to Google: No Deal Facebook's Private Share Sales Apple Acquires Quattro Wireless Amazon.com Puts Two Start-Ups in its CarteBay Loves Inc.'s 30 Under 30Urban Escapes Merges With LivingSocialTechCrunch Snapped Up by AOL The Creation of a NewsBeast
Electric car maker Tesla roared out of the garage with its initial public offering in June. The long-awaited IPO raised close to $230 million against a backdrop of plunging stock indexes. It was an impressive gain for Tesla and its intrepid founder, Elon Musk, considering the company has never seen a profitable quarter since the firm was founded in 2003. It was also the first IPO by an American car company since Ford Motors went public in 1956.
This deal would have been the largest for a venture-backed company since 1999, and Google's largest acquisition ever. Then it fell apart. Groupon walked away from the $6 billion offer in early December, quashing the search giant’s hopes of tapping into Groupon's large fleet of salespeople with intimate knowledge of hyper-local ad markets. Groupon's dizzying growth is what likely led to the dissolution of the deal. The social buying site—now at 35 million subscribers and $1 billion in annual revenue—could do an IPO as soon as next year.
The social networking giant has quietly sold its stock this year on the secondary market—a shadowy place where shares frequently trade at a premium to their real value. As a result, the firm's valuation has jumped, or dropped, a few billion every other week. Buyers of Facebook stock range from Microsoft to Russia's Mail.ru group (formerly Digital Sky Technologies). Facebook's ultimate worth—$30 billion or $3 billion—is anyone's guess. But analysts are sure of one thing: All signs point to an IPO.
To gain a foothold in the mobile ad space, Apple made a formal bid to acquire AdMob last year. But Google pounced, buying the four-year-old firm for a whopping $750 million. A jilted Apple rebounded quickly, acquiring AdMob rival Quattro Wireless for close to $300 million in January. The deal was Apple’s largest with CEO Steve Jobs at the helm, and a sign that mobile ads will be a major battleground for these two technology companies.
Quidsi, the parent firm of Diapers.com, agreed to a $540 million buyout offer from massive online retailer Amazon in November. The deal followed an all-out price war between the two, during which Amazon offered deep discounts and cash-back programs for baby gear. The move suggests how far Amazon will go to protect its turf, especially as upstart e-commerce firms—like Quidsi—grab market share by offering free shipping and around-the-clock customer service. In June, Amazon bought Woot.com for a reported $110 million. The discount retailer shot to popularity with its "one deal per day" idea, and attracted the impulse buyers that Amazon, with its vast catalog of items, simply couldn’t.
In a quest to penetrate the world of offline retail and mingle it with its online marketplace, eBay is showing its love to the entrepreneurs who landed on this year's list. In June, the online auction firm acquired RedLaser, the best-selling iPhone app that lets users scan barcodes for comparison shopping. It was a big win for Occipital, the Boulder, Colorado, start-up founded by Jeff Powers and Vikas Reddy that developed the app. This month, eBay bought up shopping search engine Milo.com (pictured here), which was founded by 30-Under-30 honoree Jack Abraham, for $75 million. Milo's search engine is linked to real-time inventory data for thousands of chain stores, allowing shoppers to find nearby items.
Urban Escapes and Living Social, which both landed on this year's 30-Under-30 list, are now one happy company. Tim O'Shaughnessy and Eddie Frederick of LivingSocial, Groupon's biggest competitor, raised a staggering $44 million in VC funding and used some of those dollars to buy the group adventure site co-owned by Maia Josebachvili and Bram Levy. It plans to bring Urban Escapes’ guided outdoor trips (night snow tubing, anyone?) to LivingSocial users in five introductory markets.
AOL acquired the technology news blog in September for a reported $25 million. The move was part of AOL's push to build a vast content reservoir—pinned on hopes that low-cost original content would bring advertising dollars. TechCrunch is a popular and influential voice in Silicon Valley, and adds considerable weight to AOL's portfolio. The deal was struck with much fanfare at a TechCrunch conference in San Francisco, where founder Michael Arrington joined AOL CEO Tim Armstrong onstage to sign the acquisition papers. Arrington polled the crowd on whether or not he should sign. "Absolutely not!" beat out "Yay!" by a 60/40 split. He signed the papers anyway.
Newsweek magazine and news website The Daily Beast agreed to a merger last month that stunned the media establishment, since the two properties have little in common aside from the fact that they lose lots of money. Newsweek is on track to lose $20 million this year, while The Daily Beast will lose $10 million. The deal put Tina Brown—the high-flying, high-spending former magazine editor who started The Daily Beast—back in the world of print as editor-in-chief of the combined operation.