Tech deals seem to be hotter than in the dot-com era, an all-time record has been registered in this year’s third quarter. The value of mergers, acquisitions and IPOs in the tech sector has reached new heights, and there seem to be no signs of slowing.
The combine value of all deals in the high tech world in the third quarter reached $73.7 billion, excluding the ones with non-disclosed valued, this is 41% higher than the value of similar deals in the second quarter.
The total number of deals is 923 which is the highest number of such deals since 2000. Out of these, 19 are over $1 billion which is a record for a single quarter. Only three of the companies involved in the top 19 deals are outside of the USA, and none are in the top ten.
Some of the largest deals in this year’s third quarter include Yahoo’s $640 million purchase of the ad service BrightRoll, Amazon’s $1 billion acquisition of the Internet video channel Twitch and Microsoft’s $2.5 billion purchase of the popular online game “Minecraft”.
These spending seem to be related to the changes the tech industry has been experiencing in the recent period. Mobile devices and cloud computing have increased their role in the tech industry. Changes also take place in the way people consume entertainment, being led by artificial intelligence and virtual reality.
Some fear a new bubble, scared by the popping of the dot-com bubble, but analysts say that things are different this time. The main reason being that these days the world has a much better infrastructure and is therefore able to take advantage of the services offered online. Another important factor is the growth of the middle class in emerging markets, mainly China and certain Latin American countries.
In a recent pool of 163 executives, a very large portion or 96% of them expressed confidence in the stability and growth of the global economy, in April this same indicator was 64%. Executives also expressed confidence in the corporate growth of their companies, 83% now, compared to 77% in April.