Five Technology Company Takeovers That Didn't Go So Well

Overnight, Cisco quietly took a knife to the throat of its Flip Video business, killing off a company they paid $US590 million for just two years ago. But Cisco isn't the first company to spend a lot of money taking over a company only to get rid of it later. Here are our five favourites, including the Flip.

Cisco murders Flip

Everybody's favourite pocket camcorder is soon to be no more. Despite spending $590 million buying the camcorder startup just two years ago, Cisco has decided to close the Flip arm of its business, which will result in the laying off of 550 employees.

Perhaps the most surprising aspect of the Cisco decision is that it didn't try and sell the company to make back some of its money - while the pocket camcorder market is certainly dying at the hands of smartphones, it's not quite dead yet. You would have thought someone would have had a bit of cash to spare to win the brand loyalty that came with Flip's popularity.

eBay strangles Skype

You know what makes sense? Mathematics. You know what doesn't? An online auction website buying a VoIP service. It just doesn't compute. It's like trying to stuff a square peg in a round hole.

When eBay bought Skype back in 2005 we scratched our heads at the decision. Even more surprising was the fact that it was only in 2009 that eBay decided to sell it back to its original founders for $1.9billion - significantly less than the $3.1billion it originally paid for the VoIP company.

On the upside, at least Skype managed to walk away from that ordeal relatively unscathed.

Apple buries LaLa

This takeover had so much potential! Apple, the rulers of the digital music space with the behemoth that is iTunes, bought music streaming service LaLa back in 2009. The internet was abuzz with the possibility of Apple launching an all-you-can-eat music streaming service to supplement its digital download store, but as time went on, no such service appeared.

To be fair, there's still a chance that Apple will launch a music streaming service using the technology it gained from the LaLa acquisition. Until they do though, it's destined to be fuel for the rumour-mill every September for the annual iPod update.

News Corporation suffocates MySpace

Uncle Rupert doesn't get this whole Internet thing. The proof is in the News Corporation acquisition of social networking site MySpace. Who else could take one of the world's hottest social networks (for a tidy sum of $US770 million) back in 2005 and turn it into the dog's breakfast of a site it is today?

Not quite dead yet, but definitely coughing up blood, MySpace has closed down many of its international arms (including Australia) and News is looking to offload the property post-haste. Considering it was going toe-to-toe with Facebook when News bought it, it's a pale imitation of its former self.

AMD silences ATI

Okay, so this one's a bit of a stretch. Processor maker AMD picked up graphics card company ATI back in 2006 for $US5.4 billion. They had a pretty good relationship - well, as good as you could hope for in a world ruled by Intel and NVIDIA - but then... BAM! In 2010, AMD decided that having two brands was bad for business and wedged an axe through the neck of the ATI branding on its lineup of graphics cards.

Sure, they kept the same technology and product lineups, but the ATI brand is now dead, and nothing's going to change that.

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