Write 3 paragraph for 3 question. That means write a paragraph for each question

Question

Write 3 paragraph for 3 question. That means write a paragraph for each question. It's a discussion question.

Discussion question:

1. Recently, Google announced that it had closed the acquisition of Nest Labs, an thermostat and smoke detector startup, for $3.2B.

2. Similar to when Facebook acquired Instagram and Whatsapp for $1B and $19B respectively, investors are questioning whether or not the Nest labs acquistion is a good deal for investors.

3. Pick two companies that have recently went through M&A activity, where one is the acquirer and the second is the target. Briefly describe each company's business model and then discuss in detail how you see the two companies integrating. How do you see the target driving revenues and/or lowering costs (creating synergies).

Explanation / Answer

Solution :

1.Recently, Google announced that it had closed the acquisition of Nest Labs, an thermostat and smoke detector startup, for $3.2B

Google is American MNC which is connected with internet related services & products for e.g cloud computing, searching etc.

While Nest labs ia associated with designing & mannufacturing sensor driven , wifi enabled , self learning thermostats & smoke detectors.

According to Google , this acquisition will enhance the Google products line & it will contribute to its goal of making a mark in smart home systems.This acqisition is second biggest after Motorola acqisition.

Google has been struggling hard to get settled in urban households like its smart TV, but has failed to deliver expected success results.By acquiring Nest Labs ,home automation company , which specialises in smart home equipments like learning thermostat & smoke detectors, Google will benefit where it did not suceed before .

2. Similar to when Facebook acquired Instagram and Whatsapp for $1B and $19B respectively, investors are questioning whether or not the Nest labs acquistion is a good deal for investors.

Facebook acquiring Instagram & whatsapp was best deal , as we can see that all three were working in same industry i.e. social networking. By acquiring Instagram & Whatsapp, facebook not only gained technology & manpower , but also mass coverage held by these two.

whereas Google acquiring Nest labs is example of two companies from different industries & having different consumer requiremnts , amalgamting together.

Main focus of Google is on future i.e. internet connected home automation products.Here Google will get advantage of not only technology & manpower , but an access to enter into smart home equipments which will operate on internet.Nest labs produce self learning thermostats & smoke detectors , which actually studies user habits & preferences & programs itself to match those needs.So here Google will go for production of next generationn home automation products , allowing them to get spread in urban households.

But on the other hand, there is also a low side to this acquisition , namely privacy infringement. As said above the smart equipments profile the human behavoiur & predict the needs.Those on other side , have a view that with owning such a valuable consumer data base at its disposal , Goolg e can use it to influence the customers for market products & a certain lifestyle, invading privacy issues.

But it is way too early to predict anything about the deal for now.

3. Pick two companies that have recently went through M&A activity, where one is the acquirer and the second is the target. Briefly describe each company's business model and then discuss in detail how you see the two companies integrating. How do you see the target driving revenues and/or lowering costs (creating synergies).

Zynga specialising in games on social networking like farmville acquired Natural motions a fellow game company having mobile game hits like CSR racing & use of Euphoria engine used for gaming technology.

Zynga has cleared out the deal for $527m for this British software Company, zynga being acquirer & Natural motions being target.

Zynga has lost nearly above 60% of its players on social networking sites, whereas natural motions is a new company understanding the customer demands. natural Motins has popular games list such as CSR racing , Clumsy Ninja & uses its unique Euphoria engine used normally for a very popular game namely Grand Theft Auto & other console games.

It could be seen as a perfect choice of companies amalgamating, where Zynga has manpower ,funds & manpower , & natural Motions has vision , updated technology & wide popularity quotient attached to its games.So Zynga would make a smashing entry in mobile games as well as online games also having additional player & higher per employee take out of income.

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