A pair of colossal technology mergers were fit to be featured this past week. Let's take a closer look.
Making room for the Good Humor man
One of my favorite corporate taunts came a few years ago from Oracle's (NASDAQ:ORCL) always colorful Larry Ellison, when he decided to strike back at a company founded by disgruntled Oracle executive Tom Siebel. Looking to recruit some of the hires at Siebel Systems (NASDAQ:SEBL) and have a little fun at Siebel's expense, Ellison sent out an ice cream truck whose driver handed out free frozen treats to Siebel employees. The wrappers all read the same thing: "Summer is near. Oracle is here. To brighten your day and your career."
This past Monday, Ellison backed up the ice cream truck again. Only this time, he's taking all of Siebel with him. Database giant Oracle will pay investors $10.66 a share in either stock or cash -- a good chunk of that funded by Siebel's own cash-rich war chest -- to acquire the corporate software rival.
Despite Siebel's recent struggles, Oracle will find ways to make the most out of Siebel's 3.4 million customers. Naturally, some of those clients will defect. Nobody expects that integrating Siebel into Oracle's already acquisitive bloodstream will be painless. However, Ellison has always been a survivor, even if his ice cream truck may fall a Screwball short here and there.
Diagnosed with a Skype-eBay personality
When Skype announced that it was considering an IPO, you had to mop up the drool in some of the discussion board areas that are part of our Rule Breakers newsletter service. The ultimate-growth-stock investors who congregate there knew all about the power of Skype and its popular voice-chat software.
With 167 million downloads and counting, Skype was sweeping the world with its freebie connections. The company is the handiwork of the same two programmers who disrupted the music industry with their peer-to-peer Kazaa file-sharing network. Skype is just as industry-altering as was Kazaa, with the significant distinction that Skype is not dabbling in gray areas of piracy and digital-content rights.
Skype, in standalone form, would be an awfully tempting investment even if it were projected to produce revenue of just $200 million next year.
Alas, the bachelor pad didn't last long, with Motley Fool Stock Advisor recommendation eBay (NASDAQ:EBAY) stepping up to swallow Skype in its entirety. It's a $2.6 billion deal that may be worth as much as $4.1 billion if certain performance objectives are reached in the coming years.
It's an unlikely suitor, but eBay was already thinking about making a play in the voice-chat space. Owning Skype would alleviate the learning curve while giving eBay one less potent competitor to deal with.
No, there is nothing wrong with the mute auctions at eBay. Folks have been happy to bid on and sell items and close out the transactions with nary a verbal peep between them. However, eBay's quest is global, and Skype's reach is even more prolific outside the U.S. -- it is an even more popular communication option in Europe.
So eBay swiped our Skype. That's OK. This is no time for tears. Other dynamic companies, such as Vonage and iRobot, look like meaty IPOs on the investing horizon. CEO Meg Whitman may be good, but she can't take them all down.
The headlines behind this week's stories:
Until next week, I remain,
Longtime Fool contributor Rick Munarriz loves to take a look back, even though he realizes that an investor cannot live off the rearview mirror alone. He does not own shares in any of the companies mentioned in this story. The Foo l has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
