Something just came to me when I saw that Apple (AAPL) has $9.2B cash on hand. The marquee tech companies have so much cash these days that each has the potential to cross over directly to a rival's turf. However, the rival has so much cash on hand that they could easily quell these aggressive moves. The process reminds me of détente (Wikipedia link), meaning that the cash reserves each company has keeps the other from expanding away from their core focus.
- Google (GOOG) has $9.8B cash on hand
- Microsoft (MSFT) has $31.1B cash presently
- Yahoo (YHOO) has $2.7B cash
- eBay (EBAY) has $3.4B cash
Along with some other tech companies, these cash reserves amount to about $60B. Of course, some of this is earmarked for stock options and retirement programs, but what's left over is certainly huge.
Chances are these companies will be relucant to take on a risky cash-based merger, although eBay did spring for Skype. Rather, these companies would be more likely to use the cash to finance their own internal growth. Buyouts will still happen, but they will be more likely to be of the $25M variety than a multi-billion dollar deal.