Google has made an acquisition: Xively makes software that helps businesses manage the explosion of connected devices known as the internet of things. The princely price tag? $50m.

This is clearly not going to stretch the finances of the $750bn search group, which once paid a single engineer $120m in a bonus. However, so miserly are the biggest US tech companies, whose dominance casts a long shadow over Silicon Valley, that any such deal is worth noting.

“It would be perfect the way it is if these companies were acquisitive,” Bill Gurley of Benchmark Capital told a Goldman Sachs conference this week. But they are not. In the past three years, Apple, Amazon, Alphabet, Microsoft and Facebook acquired outright only five companies worth more than $500m, according to Dealogic data, led by Microsoft’s $28bn acquisition of LinkedIn and Amazon’s $14bn purchase of Whole Foods.

Those are the exception. In the past decade, the only other deals from the big five to crack $10bn are Facebook’s $22bn acquisition of WhatsApp and Google’s $13bn acquisition of Motorola in 2011. Apple, for all the talk of it acquiring $120bn Netflix or $60bn Tesla, has never paid more than $3bn — the price tag for headphone maker Beats Electronics. 

This is despite a surge in the market value of tech companies. Even since the LinkedIn deal less than two years ago, Microsoft’s market value has swollen by more than $300bn. If it were to make an acquisition in the same proportion today, it would be paying $51bn. If Facebook were to do spend an eighth of its market value today, as it did on WhatsApp in 2014, it would be forking out $65bn. 

Imagine the frustration of Silicon Valley bankers, who spend a lot of time trying to persuade executives to loosen the purse strings. Without much success. As Mr Gurley puts it, for him and other investors in smaller companies: “That’s a bummer”.

Lex recommends the FT’s Due Diligence newsletter, a curated briefing on the world of mergers and acquisitions. Sign up at ft.com/newsletters.

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