Google has made an acquisition: Xively makes software program that helps companies handle the explosion of linked units often known as the web of issues. The princely price ticket? $50m.

That is clearly not going to stretch the funds of the $750bn search group, which as soon as paid a single engineer $120m in a bonus. Nevertheless, so miserly are the most important US tech corporations, whose dominance casts a protracted shadow over Silicon Valley, that any such deal is price noting.

“It could be excellent the best way it’s if these corporations had been acquisitive,” Invoice Gurley of Benchmark Capital informed a Goldman Sachs convention this week. However they aren’t. Up to now three years, Apple, Amazon, Alphabet, Microsoft and Facebook acquired outright solely 5 corporations price greater than $500m, in accordance with Dealogic information, led by Microsoft’s $28bn acquisition of LinkedIn and Amazon’s $14bn purchase of Whole Foods.

These are the exception. Up to now decade, the one different offers from the massive 5 to crack $10bn are Fb’s $22bn acquisition of WhatsApp and Google’s $13bn acquisition of Motorola in 2011. Apple, for all of the speak of it buying $120bn Netflix or $60bn Tesla, has by no means paid greater than $3bn — the worth tag for headphone maker Beats Electronics. 

That is regardless of a surge out there worth of tech corporations. Even for the reason that LinkedIn deal lower than two years in the past, Microsoft’s market worth has swollen by greater than $300bn. If it had been to make an acquisition in the identical proportion as we speak, it could be paying $51bn. If Fb had been to do spend an eighth of its market worth as we speak, because it did on WhatsApp in 2014, it could be forking out $65bn. 

Think about the frustration of Silicon Valley bankers, who spend a whole lot of time making an attempt to influence executives to loosen the purse strings. With out a lot success. As Mr Gurley places it, for him and different traders in smaller corporations: “That’s a bummer”.

Lex recommends the FT’s Due Diligence e-newsletter, a curated briefing on the world of mergers and acquisitions. Join at ft.com/newsletters.



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