Intel sells Mashery to Tibco. But what was it doing buying it in the first place?

Technology acquisitions: It's where incredulity meets fat checkbooks

conceptual artificial intelligence

When chipmaker Intel acquired API management vendor Mashery a few years ago for around $200 million, it almost made sense if you squinted a bit and stood on your head. The thinking went something along these lines:  Intel's chips needed APIs to enable a whole bunch of higher-level services, and by acquiring a company that was all about enabling API creation and management, it could do that better.

Like I said, you needed to squint really, really hard for it to make sense.

It seems that the decision-makers within Intel had mastered their squinting but have since sought some help from high-performance ophthalmologists, since they have decided to flick off Mashery to a company that actually makes sense to own it, Tibco. Tibco is, after all, a vendor that spends all of its time focusing on providing connections between applications and data ± in the brave new world, that is the role of the API, and hence Mashery is pretty applicable to what Tibco does.

For Intel, however,  it was a case of throwing good money away and a perfect example of why some publicly traded companies get the unwanted attention of activist investors (but for all the wrong reasons). It kind of goes like this: Legacy public vendor starts to lose market share or revenue growth, and hence activist investor pricks up his or her ears and goes in for the kill. Fearing the wrath of said activist investor, publicly listed company CEO gets a rush of blood to the head and goes on a shopping spree, acquiring cool new companies in an effort to revitalize the original business. Of course, these acquisitions are generally done without having a clue about the applicability of the new business to the primary business, but at least it gets rid of the activist investors for a while.

And the crime of it all is that what the activist investors should really be getting antsy about are hare-brained acquisitions like Intel buying Mashery. That $200 million? That was some shareholder dividends flushed down the toilet. Sigh.

PS: The picture I chose to go with this article doesn't indicate the amazing convergence of the human mind with technology. Rather it is a depiction of the brain explosions that often happen in the corporate world

Copyright © 2015 IDG Communications, Inc.

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