The Role of M&A in Market Convergence : Amazon, Apple, Google and Microsoft

In this paper, we analyze the M&A activity of Amazon, Apple, Google and Microsoft from 2005-2011 and classify their acquisitions according to a “Media-Internet-Technology” (“MIT”) scheme. This distinctive classification method is designed to capture recent market trends within the Media and Information Technology sectors. The need for constant innovation in post-PC offerings brought about by the rapid uptake of mobile and cloud technology has prompted these companies to use M&A as a vehicle to expand their product portfolios and position themselves better to cater to a converging MIT universe. Our paper analyzes the impact of M&A activity on revenues for each company at a segment level and confirms the presence of a statistically significant positive relationship between the two variables. A reciprocal analysis at a broader group level for the leading US-based technology companies shows no statistical significance between overall revenue CAGR and M&A activity over the same time period