10 Worst Business Decisions Ever Made

Western Union Hangs Up on the Telephone
A Western Union messenger, age 15, delivers telegrams in 1912. Back then, Western Union bet on telegrams rather than telephones as the wave of the future. Lewis WickesHine/Buyenlarge/Getty Images

Today we know Western Union as a fast way to send money around the world, but the company first gained its fortunes in the 19th century with its telegram service. Before telephones, a Western Union telegram — transmitted by telegraphs using Morse code — was the fastest way to send a message across cities, states and even countries.

When Alexander Graham Bell patented the first telephone in 1876, he wanted to cash in on his revolutionary invention by selling it to communications king Western Union. Bell asked for $100,000, a fortune at the time, and the company didn't bite [source: The Guardian]. Western Union execs couldn't envision a world in which people would ditch the handy telegram for expensive, grainy sounding telephones that didn't work over long distances [source: Telecommunications Virtual Museum].

Oops. When Bell's telephone caught fire with the public, Western Union hired rival inventors, including Thomas Edison, to design a better version [source: The Guardian]. Bell sued Western Union for patent infringement and won, forcing the telegram giant to ditch its designs on the telephone. Bell Telephone went on to rule American telecommunications for a century.