Failures of big US firms

If you believe these big actors of Internet and tech know what they are doing, you are wrong.


Among the explanations of failures of projects launched with great fanfare by major Web players, is denounced especially the bureaucracy into big business. They lose their dynamism, responsiveness, and are away from concerns of users.
But this is not the only reason, some companies have absolutely no vision for the future and instead of Midas who turned everything into gold, they spend huge amounts of money to buy popular sites and convert them into flops that are sold for almost nothing or simply closed.


Google trends to loses engineers exiling in other firms considered more dynamic. Projects from Google when announced are doing so much hype that their failure is more resounding.

Nexus One also is cited as failure. It is less certain because the device was mainly intended to demonstrate the ability of Android, which was overwhelmingly adopted by manufacturers. The failure lies in the choice of distribution.

It is therefore normal that a company that launches many projects has some failures. And this should not hide the fact that Google is taking the same importance on mobile devices with Android than Microsoft has on desktop computers with Windows.


Everything seems to succeed to Apple, that made a success at something which no one previously thought: iPod, iPhone, iPad. This should not be let to forget that the firm did not succeed in everything.
Ping is to Apple what Orkut and Google+ was to Google. Social networking site for music, but with very zero success.

Apple had some failure before Jobs'arrival such as the Pippin console, the Newton assistant, But with his politic to have only four products, They have now little chance to do a flop!


Le Kin de Microsoft
Microsoft's answer to Apple

Reigning supreme in the field of software on desktops, the company is facing a changing market, as computers now are also smartphones, netbooks or tablets.

After a big hype, Microsoft's mobile phone Kin was quickly withdrawn from sale. It has been sold only 4300 units!.


With AOL, Yahoo is a bad student on the Web. Most popular site some times ago, it has since fallen badly in ranking. It was also the second search engine behind Google. But it continuously lost market share.

Many sites bought by Yahoo when they were very popular were closed. Yahoo acquired the Qwiki app for $50 million in 2013. It is closed on 1 November 2014.
In 2009, the site Geocities bought by Yahoo in 1999 for $ 4.7 billion, and was a time the third most visited site in the world is closed in 2011. After Yahoo! had bought it, they supressed all social functions, you know, these things that made the success of Facebook!

A similar fate was given to Delicious, which was sold in 2011.


The capitalization of AOL now is a tiny fraction of what it was ten years ago.

Bebo is a social networking site similar to Facebook that was bought by AOL in 2008 for $ 850 million and resold in 2010 to 10 million after losing 50% of its members.
Previously, AOL has done even better, having bought Netscape for US$ 3 billion, it has just closed the site a few years later.

Motorola Mobility

Acquired by Google in 2012 for $ 12.4 billion, it is sold to Lenovo in January 2014 to 2.91 billion dollars. It had already sold a part of the activity, Motorola Home, to Arris for 2.35 billion.
Although Google keeps the patents, 15000 out of 17000, it is more than $ 7 billion for a portfolio that has never bothered Apple nor Microsoft currently.
But perhaps the various tax benefits of the transaction will offset the loss.

Web site failing
The bigger the project, the harder is the fall


The site had received 45 million investment fund by the founders of LinkedIn. Google wanted to buy it 200 million four years ago. It was sold 500 000 dollars to Betaworks in July 2012. It seems that besides the site itself, different parts from the firm were sold to multiple players for about 16 million. A sort of butchering.
One can get an idea of the value of a site knowing that it receives 7 million visitors per month (against 30 in 2008). It seems that its past drop in traffic was due to competition from Facebook and Twitter, but in fact much of the traffic was postponed to Reddit after Digg has changed its rules for selection of posts to a limited number of sources, leaving to the "friends" of the visitors care to provide the links that concern them most. In doing so, the site has lost a community. Also the desire to maximize advertising revenues in the manner of MySpace finished scaring off visitors.
It has been said that FB and Twitter killed Digg, that is wrong. When a ship gathers the survivors of a shipwreck, it does not mean it is the cause of this wreck.

AT&T and T-Mobile

When AT&T signed a contract to acquire T-Mobile, there was a $3 billion of breakup fee included in the agreement. Now the bid is cancelled (due to Justice Dept. opposition) and T-Mobile is happy do get the $3 billion and started to make mass investments! They no longer need to be acquired.
But AT&T shareholders are less happy...


Hewlett-Packard spent $ 1.2 billion to buy Palm, a smartphone manufacturer. But what interests us especially in this purchase, the firm said is WebOS, the multitasking operating system.
Unfortunately the first WebOS tablets are unsaleable, Best Buy returned more than 200,000 units to the manufacturer.
On August 19, 2011, HP announced the end of WebOS tablets and smartphones. The company even a time said it want to halt production of computers and focus on the software, before the CEO was fired! 
Now webOS is free and open-sourced and have some uses, but what about the investment in Palm?


This social network site was the third in the world before gradually losing its audience primarily for the benefit of Facebook.
The reason for the decline of MySpace is known, the company Newscorp of Rupert Murdoch, who bought the site in 2005 wanted to maximize incomes and exposed quantity of pages whose sole purpose was to display advertisements. For the user it was painful.
Newscorp is now looking to sell the site, after having pressed users like a lemon, for a small fraction of its purchase price.
In 1993, RM had bought the ISP Delphi (not related to the IDE), popular at the time, but which disappeared thereafter.

Bought $ 580 million by NewsCorp, the MySpace site have been resold 35 million to Specific Media in June 2011. Even if Newscorp made lot of advertising revenue, the losses have been steadily increasing.
And we can compare the price to that to the estimated present value of Facebook is between 100 and 200 billion dollars!

Demand Media

Share price of Demand Media falling

The firm that manages a number of farms, including eHow, received $ 355 million in capital venture. It makes its income from pages made only to display advertisements.
On April 11, 2011, after a change of the Google algorithm, investors have lost in one day almost half of their bet.


This search engine worth billions on the stock exchange in 2000. But leaders have found that employees preferred to use Google, which was simpler.
In fact the engineers of the firm wanted to implement in Inktomi the same elements that made Google more pleasant for users. What the leaders found too expensive.
Their reaction? Prohibit employees from using Google.
Inktomi was bought by Yahoo in 2002 for 235 million dollars, 147 times less than what it worth in March 2000.
A part of its code has been open sourced in 2009.

Corel and Novell

Novell, publisher of popular server until Microsoft can make it uncompetitive, bought the WordPerfect word processor $ 800 million in 1994. Two years later sold it to Corel for $ 200 million.
A few years later, Corel itself has sold as a whole for 200 million too.

I could cite also Kodak which was still selling classical camera in the goal to continue to make money with filmstips, while all other manufacturers moved to digital cameras... And many others...

The reasons for these failures are varied. For some it is a total apathy, which makes the site disappears for lack of renewal. Others try to maximize advertising revenues to such an extent that disgusted users prefer look elsewhere. Again others have based their business on an economic model too random.

See also The fall of Internet giants AOL, Myspace, Yahoo...