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Top 5 Rejected Tech Buyouts

Will Federman |
November 14, 2013 | 2:46 p.m. PST

Tech Editor

Snapchat's staunch refusal of $3 billion has some scratching their heads. (Flickr/Ryan Nagelmann
Snapchat's staunch refusal of $3 billion has some scratching their heads. (Flickr/Ryan Nagelmann

On Wednesday, Snapchat turned down a buyout offer from Facebook worth over $3 billion - a hearty sum to walk away from.

The Venice Beach-based startup produces a social media app that allows you to exchange messages that vanish from its servers after 24 hours. Whether or not the Internet debate over the rejection will have the same shelf life as a Snap remains to be seen.

SEE ALSO: Snapchat Rejects Facebook's $3 Billion Offer

But Snapchat is not the first tech company to turn down a substantial buyout.

Perhaps empowered by Twitter, which fended off overtures from Facebook and Google only to win big when it recently went public, several other tech companies have refused buyouts in the past. Here are five less fortunate tech companies that came out on the losing side of that decision.

Foursquare decided not to check in with Mark Zuckerberg. (Flickr/bfishadow)
Foursquare decided not to check in with Mark Zuckerberg. (Flickr/bfishadow)

Foursquare

Foursquare rejected buyout offers from Facebook and Yahoo in excess over $100 million back in 2010; one suitor reportedly offered as much as $140 million. But CEO Dennis Crowley stood firm on his $150 million counter-offer and bids quickly dried up. To add insult to injury, Facebook and Twitter quickly gobbled up competing geotagging apps Gowalla and Spindle for considerably less. Despite the fact that Foursquare recently received an investment of $41 million, some analysts believe it may now fail by the end of this year.

Qwiki-ly run away. (Flickr/Rasmus Knutsson)
Qwiki-ly run away. (Flickr/Rasmus Knutsson)

Qwiki

When Qwiki won editor's choice at the TechCrunch Disrupt in 2010, the mobile video app was seen as the next big thing. Google offered to buy the fledgling startup for upwards of $150 million in cold, hard cash. Then Vine happened. Qwiki never really took off and floundered in the mobile social media space. Yahoo finally bought Qwiki in July of this year for less than $50 million, a third of what Google initially offered.

Friendster has run out of friends. (Flickr/Gian Cayetano)
Friendster has run out of friends. (Flickr/Gian Cayetano)

Friendster

Before Facebook, there was Friendster. In 2003, Google offered to buy the fledgling social network for $30 million worth of stock. If Friendster had taken the offer, the stock would be worth over $1 billion now. Instead, Mark Zuckerberg started his own social network and Friendster became the subject of a brilliant New York Times article chronicling its missteps. Friendster was eventually bought by an Asian conglomerate in 2009 for $26.4 million and now lives on the fringes of cyber space.

The house of yahoos. (Flickr/Yahoo)
The house of yahoos. (Flickr/Yahoo)

Yahoo!

In 2008, two of the largest tech companies began to realize what many already knew: the age of Google was upon us. Microsoft scrambled to mount a formidable defense and offered to buyout an ailing Yahoo for $44.6 billion worth of cash and stock. For many, it was seen as a no brainer.

But CEO Jerry Yang rejected Microsoft's offer of $31 a share. The episode sent Yahoo's stock and prestige stumbling, Yang left Yahoo and Microsoft moved on. Only within the past year, 5 years after the buyout proposal, has Yahoo's stock price neared Microsoft's original bid. But the company's evaluation is significantly smaller and one wonders how different the search engine wars could have been if Yahoo had accepted the deal.

Groupon was a bad idea from the start. (Flickr/Groupon)
Groupon was a bad idea from the start. (Flickr/Groupon)

Groupon

Groupon, the once-promising startup that sells discounted deals and coupons that you can share with friends, was offered a $6 billion buyout from Google back in 2010, but CEO Andrew Mason balked. After an initial public offering that was seen as somewhat of a success, two years of mismanagement have revealed Groupon to be an unmitigated disaster. Groupon finally fired Mason earlier this year. Still struggling to consistently hit revenue projections, Groupon now offers gimmicks like $5 million in free "Groupon bucks" to generate market interest. Imagine what it could have done with $6 billion.

 

Reach editor Will Federman here or tweet him at @wfederman.



 

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