Tech Odd Couples Team-Up to Keep Pace with Competition

March 24, 2017

By Fred Kosnac

The tech industry operates in a fast-paced, ever-changing environment where even competition is constantly evolving. Companies—that on the surface don’t seem to have much in common—are finding unique ways to expand through M&A transactions and partnerships in response to growing competition.

Kickstarter, an online funding platform, acquired Huzza, a video streaming service, to gain a competitive advantage on the growing number of competing crowdfunding sights available to aspiring entrepreneurs. The company had added video streaming capabilities for its users via an earlier collaboration with Huzza. The acquisition allows the combined company more control over the service, while leveraging resources to expand on future capabilities.

Social media giant Facebook signed agreements with Major League Baseball and Major League Soccer to stream live games over the course of the 2017 seasons. Facebook has been active in making deals with different sports leagues to provide live content as more people move from traditional television to digital offerings. These maneuvers can be seen as a direct response to Twitter, which has made similar deals with the NFL, NBA and even the National Lacrosse League.

Microsoft acquired Beam in the summer of 2016. Beam creates a social, interactive video game experience that allows gamers to stream another player’s gameplay while playing alongside them on their own Xbox system. Microsoft is hoping this service will sway gamers to buy their system vs. Sony’s PlayStation or Nintendo’s Switch.

The above represents a small sample of M&A activity in the technology sector as companies continue to look for innovative ways to grow market share. As new technologies emerge and evolve, it will be interesting to see what other “odd couple” partnerships take shape and how they fare.

About Fred Kosnac

Mr. Kosnac provides accounting, auditing and business consulting services to businesses in both the public and private sectors. He also contributes to EisnerAmper's technology and life sciences blog.