Cash, Paranoia Fuel Tech Giants’ Buying Binge

Nice pice on disruption fear driven tech M&A:

From messaging to watches and thermostats, Facebook and Google, along with Amazon.com Inc. and Apple Inc., each want to own the digital platform where people communicate, shop and seek entertainment. The competition is driven by their ability to pay—their combined market capitalization exceeds $1 trillion—and long memories of faded tech stars that didn’t evolve quickly enough.

The four companies are competing to control as much as possible of the tech ecosystem. In Silicon Valley parlance, it’s all about controlling “the platform.” A big reason is to gather data about users, to serve them ads or to anticipate their next purchase.

Cash, Paranoia Fuel Tech Giants’ Buying Binge

The influx of cash in technology is largely the result of the low interest-rate environment, Bill Gurley, a partner at venture firm Benchmark, said in a March 12 interview on Bloomberg West. Yields on 10-year Treasuries have hovered below 3 percent since 2011.

“There’s a lot of capital searching for a home,” said Gurley.