Pyrrhic Victory

Pyrrhic victory is a victory or success that comes at the expense of great losses or costs. In business, examples of such a victory could include succeeding at a hostile takeover bid or winning a lengthy and expensive lawsuit. The expression alludes to King Pyrrhus of ancient Greece, who, after defeating the Romans in battle, reportedly said: "If we win another such battle against the Romans, we will be completely lost."

Pyrrhic victories, in the business world, often occur in the courtroom when a judge rules in favor of one side but the cost of bringing the case far exceeds monetary rewards for the winner. The escalation of the buyout price to execute a hostile takeover, followed by disappointing returns from the acquired company, is another example of a pyrrhic victory. In 2001, Microsoft won a Pyrrhic victory in its antitrust case when an appeals court decided that the software giant was not to be broken up. However, Microsoft was still branded a monopoly and was subject to other punishment.

In 2011, Hank Greenberg, formerly the CEO of American International Group, filed a lawsuit against the U.S. government alleging that the terms of the government's bailout of his insurance company were harsher than those imposed on other financial institutions after the financial crisis of 2007-2008.

After four years, during which Greenberg is estimated to have spent millions of dollars on legal fees, the judge agreed with Greenberg's premise but did not award any monetary compensation. While the court found the terms of AIG's bailout were more stringent than those placed on other financial institutions, the judge stated that, without the bailout, the insurance company would have been shut down. The result was that Greenberg spent millions, got the pyrrhic victory and walked away with nothing.

When AOL took over Time Warner in a hostile takeover valued at over $160 billion in 2000, the acquisition was hailed by AOL as the deal of the millennium. Shortly after the deal closed, however, the tech bubble burst, and the combined company AOL Time Warner lost $200 billion in market cap over the next two years. Revenues were also squeezed by the rise of broadband internet, which delivered far better performance than AOL's dial-up services. After years of trying to synchronize the operations of the two distinctly different companies, Time Warner spun off its AOL holdings in 2009, ending what's referred to as one of the worst mergers of all time.