Blog Post

A failed experiment: How LG screwed up its webOS acquisition

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

Things were looking up in early 2013 for the team behind webOS, a pioneering but star-crossed mobile operating system. After surviving the implosion of Palm and a rocky acquisition by HP, LG stepped in to buy the team. The consumer electronics giant seemed like a white knight with a plan: To make webOS  the core of LG’s next-generation smart TV platform, and use the brains behind webOS to create a much-needed engine of innovation at LG. To create a unit that was meant to help the company to beat competitors like Samsung with Silicon Valley smarts. A disruptive force.

Eighteen months later, the acquisition looks a lot like a failure. About a third of the webOS team has left [company]LG[/company] since the acquisition, including some recent high-profile departures. Others are close to making the jump, as early euphoria has been displaced by disillusionment and frustration. The LG Silicon Valley Lab, as the webOS unit is now officially called, introduced LG’s first webOS-based smart TV at CES in January, but the road to Vegas was rocky, and the device unveiled at the show almost didn’t happen, save for a few lucky accidents.

I’ve talked to a number of current and former webOS team members as well as people with knowledge about the decision making process within LG over the last couple of weeks, and the picture emerging from those interviews is an ugly one, full of fights and corporate politics. It’s a story about about a failed acquisition, but also about the changing realities of consumer electronics, which are transforming from simple appliances to smart devices at a speed that often leaves big, slow-moving companies at a loss.

Critics loved LG’s new smart TV at CES

From the outside, LG’s webOS acquisition may seem like a success story. The Korean consumer electronics maker made a big splash at CES in Las Vegas this year with its first webOS-based smart TVs, which proposed a radically different interface for connected televisions. Instead of busy home screens full of app shortcuts, LG’s TV featured a simple tab-based launcher at the bottom of the screen that was somewhat reminiscent of the original webOS, while adapting its design philosophy to the TV environment.

webos tv launcher
LGs webOS TV is controlled through a horizontal launcher at the bottom of the screen.

LG’s webOS TVs didn’t have separate menus for TV inputs, apps and web content, but instead treated everything like tabs on a horizontal launch bar. The launcher incorporated a kind of history, surfacing apps that users most recently launched and hiding rarely-used services, while still offering users a way to personalize their own experience.

This was very different from LG’s previous smart TV system, which was a convoluted mess of competing menus, shortcuts and app stores, and its clear vision also set itself apart from much of the competition. Critics seemed to like this approach, calling it “very, very well executed,” “more intuitive than most other smart TVs” and even “the best smart TV UI we’ve ever used.

How LG really wanted its webOS TV to look like

To the webOS team, these accolades were doubly rewarding. That’s because the team had been in a several-month-long battle over the interface with LG managers in Korea, who preferred a vision that’s been described to me as a mixture of the traditional LG smart TV platform and the user interface [company]Samsung[/company] first introduced at CES 2013.

If Korea had had its way, webOS TVs would have had an additional menu gallery of vertically-scrolling cards, including one for personal media sharing, one for browser bookmarks and one for all installed apps. Altogether, the UI was to consist of close to a dozen such cards that consumers would have had to rotate through to find the apps or content they wanted.

webos tv simplicity
The interface of the webOS TV is remarkably simple and clutter-free. Thats not what managers in Korea had in mind.

The Silicon Valley team fought this interface tooth and nail, but LG moved forward with it — only to realize eventually that it had become too resource-intensive to run smoothly on its TV hardware. CES was approaching quickly, and LG’s engineers ran out of time trying to make their complicated interface work, so the decision was made to go with the webOS launcher instead in order to have anything up and running at all.

“We got lucky,” said one member of the original webOS team, who like others in this story declined to be identified by name.

Feature bloat as a result of ill-conceived corporate policies

I’ve been told that this anecdote was symptomatic of many of the struggles the webOS team was facing across all parts of its operation, including engineering. Despite repeated requests, LG never hired more engineers for the Silicon Valley group. Instead, it put them at the mercy of engineers in Korea who were beholden to their local management, and frequently built features that the webOS team didn’t ask for, or worse, had long fought against.

On the engineering side, the webOS team also struggled with a culture clash of sorts that pitted company politics against its attempt to simplify the company’s smart TV platform. Sources told me that LG had a policy in place to reward managers with bonuses or even promotions if their features were part of the final product. The result was a constant feature bloat, as everyone tried to add on one more thing.

Previous smart TVs made by the company were a lot more confusing.
Previous smart TVs made by the company were a lot more confusing.

The result of that policy can still be seen on LG’s previous-generation smart TVs, which long featured not one but two app stores, forcing consumers to decide whether the app they were looking for was a “premium app” or a “smart world app.” To consumers, those TVs were simply confusing. Insiders on the other hand recognized a representation of LG’s internal power struggles, with each team getting their own, dedicated section in the UI, whether it made sense or not.

The constant fight against this feature-bloat wore the Silicon Valley-based webOS team out. One member told me that the two sides were “like water and oil.”

The tumultuous history of webOS

Of course, it wasn’t all smooth sailing for the webOS team before the acquisition through LG. The Linux-based operating system was originally conceived by [company]Palm[/company] as a successor to its dated Palm OS, meant to prepare the company to compete with Apple and Google in the smart phone world. But Palm failed to gain traction in a world that quickly became a two-way race, and was eventually acquired by [company]HP[/company] in 2010.

The computer giant also had big plans for webOS, and wanted to make it the center of its mobile strategy. But soon after, HP did a huge turn-about when it released the webOS-based Touchpad in early 2011, only to kill the project a few months later, and sell all remaining inventory at huge discounts. In late 2011, HP turned webOS into an open source project, and spun off the webOS team into a separate corporate unit called GRAM.

GRAM was supposed to operate in stealth mode and incubate a whole range of new products and services for HP, but none of it actually ever launched. When LG eventually acquired the unit, spirits were high, because it seemed like an actual product launch was finally a real possibility — and because LG representatives told the team that it would was one of the most valuable assets within LG, with a clear mission of innovation. Here’s how LG CTO Scott Ahn put it at the time of the acqusition:

““This groundbreaking development demonstrates LG’s commitment to investing in talent and research in Silicon Valley, one of the world’s innovation hotbeds. It creates a new path for LG to offer an intuitive user experience and Internet services across a range of consumer electronics devices.”

Internally, the team was told that it shouldn’t get bogged down by bureaucracy, and promised to operate largely independently. “But when push came to shove, nobody would back us up,” said one team member.

LG is not alone in its struggle to understand this new world

In a way, LG’s struggles with webOS aren’t surprising at all. It’s not just that the company is a giant organization with long-established internal bureaucracies; it’s also a company that for decades has made billions with producing and selling washing machines, refrigerators and vacuum cleaners. For a long time, TVs were just another appliance for LG, something that consumers bought based on size and picture quality, and then replaced every five to ten years. The product was clearly defined, and so was the market. Sure, some players changed, some markets were up for grabs, but Samsung had long been the biggest competitor that had to be matched or beat on all fronts.

With the emergence of streaming services and connected devices as well as the growing dominance of Chinese TV manufacturers, the field has begun to change more dramatically, and companies like LG are at a loss at how to respond. LG’s first attempt to build an Apple TV competitor was a colossal failure and its own smart TVs were a complicated mess. Attempts to get a stronger and easier-to-use platform by using Google’s Google TV system didn’t go anywhere either.

LG did manage to launch a pretty innovative TV -- but it failed at changing its culture.
LG did manage to launch a pretty innovative TV — but it failed at changing its culture.

But LG isn’t alone with this at all. Companies like [company]Sony[/company] have been all-but-steamrolled by the market changes, and even [company]Samsung[/company] long stumbled to get smart TV right, at times introducing products that were completely detached from reality.

In a way, investing in webOS made a lot of sense for LG’s TV plans, and the introduction of the webOS TV as well as initiatives like its Connect SDK showed that the company was on the right track. But with its huge attrition rate, damaged morale, and decisions about the future of webOS TVS being shifted to Korea, one has to wonder how much of that vision will survive the coming months. “I don’t have a lot of faith in this operation,” said one team member.

The bottom line is that save for a miracle or a radical change in course, LG may simply have screwed up this acquisition. “I see this as a failed experiment for LG,” said a former team member who left the company in recent months. “We didn’t change LG.”

40 Responses to “A failed experiment: How LG screwed up its webOS acquisition”

  1. vegazosten

    I’m planned to buy a LG tv bcs I hate my Samsung SMART TV! Using youtube is full of crap… 30 minutes is 5 minutes usefull! The rest is black and waiting . Pushing the return button go ahead take a coffee first! Man what a crap,
    Sometimes it do nothing anymore, even power off wouldn’t help. Sometimes I needd to unplugged electricity to restart it! Yeah that’s funny….I think even LG works better, no?
    There is a sensor buildin to save energy, power on the tv in a dark room and it lights up as hell. You need the darkest sunglasses ever when this happend! I wouldn’t buy a Samsung anymore I rather choose LG!

  2. I beg to disagree. I had a Samsung smart TV (purchased last year Nov) which developed a small defect and I returned it and purchased a LG 55lb6500. I must say it is the best smart device I have ever used (I have experienced black berry, iPhone and Samsung Andriod). It was easy to navigate, the voice recognition engine understood my 6 year old boys (the phones could not), the tabbed navigation was simple and intuitive, just a really great device.

    I think this is a winner. the most recent firmware upgrade did wonders for the usability of this device. The comments from the critics are correct “very, very well executed,” “more intuitive than most other smart TVs” and even “the best smart TV UI we’ve ever used.”

    The LG team who fought to keep this design approach must be commended.

  3. Slavon Smartmil

    To my mind it would be to LG’s advantage to keep it all open. If for some reason WebOS on the TV is a hit. They’re in the business of selling commodity electronics. If buying WebOS helps and pays off by getting people to buy more TV from them with Netflix service already installed then so be it. Or something better like a commercial display that you can network.

  4. Morbidgod

    It’s always nice to read these stories, however being part of a small company getting swallowed by a larger one, it takes time and patience to make this work. When ADT bought Brinks, originally it made everyone mad. But now that we’ve had four years to meld in it’s people within Brinks running the show and changing ADT. LG bought WebOS last year, and they inherited the people who was still there. It will take years for LG and those team members to meld together correctly, and the fact that they won AND WAS right selling over a million tvs within the first couple months is a big success. It proves to LG that maybe they should listen to their input. Hopefully, LG will take this as a cue to them.

  5. As typical with most if not all bureaucracies, there a bureaucrat’s who sit in their nice office and are separate from reality. This happens in governments, business and any other similar situation. Instead of increasing their chances for some sort of bonus, they should open their eyes and see what the real world is up to.
    And besides, what happened to using the KISS principal – “Keep It Simple, Stupid” ?
    Whereas they are working on the mantra – “Keep It Simply Stupid” !

  6. token_millennial

    WebOS will fail at the legs of chromecast wielding millennials, sorry to break the truth to the LG PR team and employees posting here, trying to save their jobs. The ride was nice while it lasted eh? All hail Google!

  7. Shane Tyler Burns

    I don’t get it? A failed experiment?!? WTF!?! LG recently announced that they sold 1 MILLION WebOS TV WITHIN three month? How is that a failure?? LG is very successful with their new Smart+TV. Im sorry but the old WebOS is gone and eventually you have to accept it. (Like me) The most important part is that WebOS have a new home.. in Smart TV

    FYI.. My LG WebOS TV.. LG 47LB6300 to be exact.. It have separate menu inputs. You need to check out and TRY their TV. I love mine and you should too

  8. Trouble

    This article points fingers at LG (Korea); maybe there are issues in local management at SVL. Maybe too talented and egoist for their own good???
    I wonder how they will report this experiment in Korean blogs. Maybe it goes something like this “SVL team does not know much of TV; being release manager for android UI does not make them expert” :-)
    In general I agree with this article.

  9. Robert D

    I once worked for a company that had a strategy department, the company was to reinvent itself. It was a colossal failure, so I really sympathize. The webos team at lg did get lucky, though, to get one product out the door.

    We didnt get so lucky. Every change was blocked. I do not feel disgruntled, but I did have to quit eventually, as the whole thing was a waste of my time.

    This sort of thing does happen. Management means well at first, but does not always follow through.

  10. Thierry BEAU

    What a waste… It shows that building a GUI (and thus becoming a software editor) is not so easy for hardware manufacturers given that they consider that the HW part is more important than the SW part of their story. Building a GUI is a strategic decision not a simple add-on to the Hardware component… Only a few made it a success (Apple is one very good example, sorry..)

  11. LOL. It’s LG.

    Many years ago I had some LG engineers in my office. We were collaborating on a DVR project. I had it on the scope (Tek VM700t) and noted that it’s analog video output was totally off the NTSC spec.

    “We do that to make it look good on our TVs”

    That is all I needed to know about LG. Not even once, man.

  12. samfresco サムエル

    I own a 3D 42″ LG Smart TV (LB6500). I love the new Magic Remote as it is used just like a Wii Remote. The webOS is awesome. Some apps like Netflix work lag-less and even pause when changing to another app, withou having to restart the app. It turns on in 3 sec. and display the lastest connection used (Live TV, or any HDMI input), though, changing to another connection takes like 10 sec.( just when turning on the TV). You can turn 3D on any app or connection even if the source isn’t on 3D and works great. Buy and try one by yourselves before being negative.

    Though, there are a lot of improvements to do: The webOS TV Remote app from LG crashes. I only used it like 5 times. Now it can’t connect. I don’t know how to delete app data (i want to restart YouTube app). Also, I would like to see and manage internal storage. Seems to be like 1GB (seems too low for me).

    I mostly use it to play Wii U, Wii, and watching Netflix and Blu-ray movies.

  13. Rizarsky

    The reason there are as many SmartTVs as there are out there, is because that’s what’s on the shelf when people go buy a TV. In reality, no one is clamoring for a SmartTV, and that’s because, 1) they are do difficult to use, all of them, and 2) the main use of a SmartTV is to see Netflix, YouTube and maybe Hulu. Developers don’t see people downloading apps to their Smart TVs, so why build them?

    The best way to use a SmartTV is to cast to it from your mobile device, ala Chromecast. That’s all SmartTVs need, a Chromecast like ability. Apps and all those menus and choices? No one wants that.

  14. Is it just me or are there LG employee’s commenting on this article …. -_- That being said LG G3 was great and is great, I’d like to see more simplicity and usability in south korean products that want to play in the global market.

    The aim should be to adopt the best culture necessary for bringing to light the best products.

  15. Wim Hasselo

    This is not a technical iseu, an organisation one. How management respect their new aquited organisation / people. And how the frurtration influenced the peoples creativity an plesure of labor.

  16. The display venture with Philips didn’t fare well? You do realize that lG Display is now the biggest display maker in the world, right? It looks like LG got exactly what it wanted in that deal! So how do YOU define success, Mr. Poor?

  17. ian bastable

    Having recently been contacted by LG concerning some issues i was having with my WebOS TV i would like to disagree with this article.
    The launch of many successful products have been preceded by tortuous gestation periods of internal conflicts, a simple examination of the launch of the iPhone will support this (i chose iPhone because it is still a huge success i could equally choose PlayStation, android etc). Lucky breaks are part of the product(ion) process.
    Did any one call LG for input? LG is committed to WebOS (on ALL TVs in 2015) and has gained many positive reviews / new customers thanks to their “game changing” Smart TV line up for 2014. To suggest that the company would abandon these gains due to internal squabbles is naive in the extreme, and disrespectful to LG itself, a capable and innovative CE company.
    That a product development process is sometimes a period of attrition is well known. Relationships are strained, Departments fight for relevance and the right to participate in a new product that excites them. During the process some people burn bridges, become disenchanted: other the opposite. After a launch a period of reassessment follows whilst the performance of the product is assessed and areas identified for fine tuning and future development. WebOS for the TV range has already been updated numerous times with no apparent “Bloat” added as yet.
    Back to me. I was unhappy with my product and the service provided in the Netherlands (Not i expect LG’s nr.1 market), i took the time to mail LG with my issues and concerns, politely, and was contacted this week by a Technical staff member who carefully asked about my issues, listened and made note of my concerns. He will report back to myself and to Corporate LG as his investigation progresses. THIS action speaks volumes about LG’s commitment to WebOS and it’s success at launching a product that has the interest and active support of it in-house development team. It certainly does not support your vaguely “rats deserting a sinking ship, doom scenario”…
    These articles, driven by comments made by ex-employees, should (prior to publication) be fleshed out with input from the current team: a team which can be very happy with the initial sales and reviews of these universally praised TVs.
    Many of our favorite products lost their initial team members and went from strength to strength without having such negative articles published so soon after launch. That LG has not gagged ex team members with non-disclosure clauses is a compliment to their confidence in their team, should these negative insights come from a person hiding behind anonymity (whilst breaking their non-disclosure agreements) i would question their motives and opinions.
    So, in short (haha), let us applaud LG for their apparent luck with the existing WebOS
    interface. Let us congratulate them on GREAT reviews. Good sales…etc
    and FINALLY, lets have faith that the future development will be positive and include great product planning and some lucky breaks because LG IS COMMITTED to WebOS, and why not? Actually owning and using this product is easy and pleasurable…i am 80% satisified! (that is 80% more than i was satisfied with my previous smart TV from Samsung, which was an over priced tortoise of a product which i hated from the day i installed it)

      • ian bastable

        I will forward your article to LG for you, i am sure you will be happy to allow them input should they wish.
        Janko, i would be interested in a reaction to the points i raised: why this 100% negative tone?, when i am sure you are as aware as i am, that product launches often develop in chaotic ways…without your website labeling them (in the early phases) as “a failed experiment”, especially since webOS is definitely an ongoing project?

        • Ben Ilfeld

          Woah now – This seems to be less about the quality of the actual OS and more about the team falling apart.

          It’s often the case that a larger company buys a smaller one and hopes that the culture of the smaller company can be maintained or even carried over.

          Unfortunately institutional forces often kill the culture of the smaller company.

          Will LG end up with great TV’s? Perhaps. Is what is left of the webOS team unravelling here? Yes.

        • Cardare

          It isn’t 100% negative though (and your first comment reads like a press release in parts so I think I know what’s going on here). Articles like this sometimes get written with the intention to make positive change within a loved company by identifying what made things difficult so they can be fixed (if the company management is willing) from platforms to company processes. As someone who works with chaotic management I can relate to the dev team in Silicon Valley in this instance. Management is often chasing short-term success over long term business success and reputation (which is what matters). LG in Korea obviously got this wrong.

          To be honest, it is up to them if they are ‘happy’ with the “failed experiment” tag this article has given webOS. If LG doesn’t like the “failed experiment” tag, it knows what it must do: Listen to the software dev teams they hired, change the processes that allow this feature creep to happen at all, and turn ‘ok’ products in to the next big thing.

          As someone who loves webOS, I hope they realize sooner rather than later.

          • ian bastable

            Actually quite a nasty little reply Cardare…i resent being accused of being a press release. I disagreed, took the time to do some research and posted my reply including my personal experience of LG and WebOS to illustrate their commitment and my motivation for challenging this article.
            As to Lg getting it wrong we must access your criteria: Wrong?, being that the Team that made WebOS is disintegrating?, little wonder since after many years of development they have only launched failed products?! or Right?, being the considerable achievement of allowing said team to integrate the excellent WebOs into TVs with critical and commercial success?
            (thus breathing new life into the WebOS platform, which still exisits outside of TVs due to LGs continued support)
            And just a little update regarding “feature creep” : tonight my WebOS TV received an update that added little screens of explanation to the otherwise smooth and minimal design of the WebOS interface…after some initial irritation i understood that these would help new users in their 1st days with the system, and remembering that this is WebOS i quickly zapped over to settings where i was easily able to turn off this extra feature.

            • Ian, putting blame on WebOS team is almost like saying it would be S. Wozinak’s fault if Applle I didn’t pick up. Let’s face it, companies like HP, Samsung, HP, IBM may never “get it”. These M&A happen all the time and in many cases result is the same, money and contracts hold the team together but only for a time being, the end is predictable, corporate priorities and internal processes win and innovation (consumer/customers) lose.

      • Very one sided article. Why are you only talking to disgruntled ex-employees? Surely they could have given you the emails of former colleagues who stayed at LG. GigaOM, you disappoint me.

      • ian bastable

        The comments here are always cool to read long or short, that is what sets gigaom apart. Should the length be an issue for you? May i , with respect suggest FLIPBOARD app…gives the story without the comment. Failing that Twitter?

  18. NoBigGovDuh

    I have one of the 2012 LG smart TVs. It is a bit confusing but not too bad. It is underpowered and sluggish sometimes. The Amazon app is sometimes non-responsive but plays the video smoothly. And it has awesome codec support to play media from a upnp device and implements the Digital Media Renderer spec pretty well. The remove display function is hit and miss, oddly my LG made Nexus 5 won’t transmit it’s display correctly but a samsung S3 will. And just last month they updated the TV again so it gets some minimal support.

  19. evilensky

    I wish that more resources could be put into higher-quality panels rather than features. A $49 Roku makes a lot more sense than some never-to-be-updated facsimile that will probably be abandoned as soon as the TV finishes shipping.

    • mlippert255

      Right, that’s my opinion as well. I don’t want a “smart” TV. I want an excellent display that I can connect to a “smart” device like a Roku. That way I have an excellent TV for 10+ years and a “smart” device w/ capabilities that I want, that can be upgraded or replaced many times over the lifetime of the TV.

  20. Alfred Poor

    Great story (as always), Janko. One particular point that I find interesting is that this is a bit of history repeating itself when it comes to LG’s mergers and acquisitions. Their joint venture with Philips in the flat panel business did not fare well either.

    The theme for me is that when companies look at joint ventures of one for or another, they naturally focus on the best features of both parts and see the gains to be made by combining them. It’s so easy to overlook the possibility that you’ll get a combination of the WORST features of both, which can lead to finger pointing and failure.