Pennies were pinched in Mountain View last year. For much of its existence as a public company, Google had made a headline-grabbing acquisition at least once a year as it used the profits from its surging ads business to bet on new frontiers. Billions of dollars went to scooping up Motorola, Nest, HTC, and Fitbit to build up it hardware business. Apigee, Looker, and Mandiant rounded out Google’s cloud computing unit. But Alphabet’s latest annual report reveals that the splurging stopped in 2023.

Alphabet omitted a section describing acquisitions over the past year in the annual report filed this week to the US Securities and Exchange Commision, meaning any dealmaking wasn’t significant enough to flag to shareholders. New financial results released by Amazon and Meta Thursday showed their own spending on acquisitions also dipped significantly in 2023.

The slowdown suggests pressure from antitrust regulators concerned about corporate power and investors who demanded cost cuts as interest rates jumped is forcing tech giants to pull back from one of their signature strategies. The European Commission and other regulators have increasingly challenged deals that they view as a threat to fair competition, forcing companies such as Amazon and Adobe to abandon planned purchases. Alphabet, Amazon, and Meta each laid off thousands of workers last year.

“Deals from mega cap companies are being much more scrutinized,” says Angelo Zino, who studies tech stocks as vice president and senior equity analyst at CFRA Research. “In addition, 2023 was more of a cash preservation year.”

Google and Amazon declined to comment. Apple and Meta did not respond to requests for comment.

Chilling Effects

Since Google first went public in 2004, the company has never until 2023 had a year without a section in its annual report on acquisitions. The new filing says Alphabet did spend $495 million net in cash on acquisitions or “intangible assets” last year, an outlay that is the company’s lowest since 2017. Intangible assets could reflect standalone purchases of patents or trademarks.

Apple has also pulled back. It spent $306 million in cash on acquisitions during the year ended September 2022, but had so little to disclose for the year ended September 2023 that it removed the line item about deals from its annual report and instead bundled any such spending into a line called “other,” where spending fell 36 percent.

The latest financial results released by Meta and Amazon Thursday suggest that cost cutting can help boost profits, though that may not be their primary motivation. At Meta, cash investment in acquisitions or tangible assets dropped by half to $629 million in 2023, after two years of growing spending. Those savings along with layoffs and additional cutbacks led Meta’s profits to soar about 69 percent in 2023.

Amazon’s results show that it swung to a $30.4 billion profit in 2023 from a $2.7 billion loss the year earlier. The fact that net cash spending on acquisitions “and other” dipped from $8.3 billion in 2022 to $5.8 billion last year certainly contributed after years of ups and downs in those expenditures.

The dive in acquisitions comes after several years of increasingly aggressive enforcement of antitrust laws from Washington and EU regulators and threats from lawmakers to impose new restrictions. While companies still consider acquisitions, they have in some cases decided that the potential pushback could be too much to bear.


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