What does Mark Zuckerberg think he’s doing, spending $2 billion on Oculus? You could take him at his word — that he sees virtual reality as “a new communication platform” where “truly present” people “can share unbounded spaces and experiences”. Basically, virtual is the new mobile, and Zuckerberg wants to get in on the game early.
Simple began in July 2009, but it took three years before it was ready to actually start sending its debit cards out to members of the public. And now, after just 18 months as a scrappy independent financial-services provider, it’s being bought, for $117 million, by Spanish banking giant BBVA.
Amidst all the positivity coming out of Yahoo and Tumblr, any self-respecting pundit is going to want to pour cold water on the whole deal. Especially since billion-dollar mergers almost never work out very well. But here’s the weird thing: the more I look at this tie-up, the more it makes sense to me.
Reading Warren Buffett’s latest shareholder letter, I was struck by the number of times he talked about bolt-on acquisitions — situations where one of his subsidiary companies makes an acquisition of its own. They’re mentioned six times in this letter, and then at the end he mentions a “tuck-in” acquisition, which is essentially the same thing.
Why is Google buying Zagat, a company which has failed miserably online, rather than, say, Yelp or Tripadvisor? I suspect a lot of the reason has to do with its pseudoscientific ratings, on a 30-point scale: Google loves being able to quantify stuff. But those ratings are silly: they’re not at all comparable between markets (try a sushi joint in Long Island and then compare it to one in New York City with an identical food rating), and they suffer from enormous inflation.