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What happens after Yahoo acquires you

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Re: What happens after Yahoo acquires you

#21

Post by diego »

kenjackson wrote: post #13

So why does Yahoo buy these properties? While I'm sure we'd all like to think the decision makers at Yahoo since day 1 were all idiots who like to spend millions of dollars on companies and then let them die, but is there actually a rational reason? Were they trying to keep them out of the hands of Google? Did they do it purely for the eyeballs and thought with no additional spending they'd get their money back out o…

Of course there are reasons, too many to count. I'm very close to one of the acquisitions on the list (as an early employee I made a modest profit). It comes down to a combination of:

- Team: the acquirer likes the people and believes they will add value if convinced to stay on board.

- Product: they like what they see, and they believe they can incorporate it into something they have in a relatively painless way. They think about what it would take to build it and it's mostly a time thing. They can spend the money but generating the momentum to build it would take too long.

- Traction: this basically determines the price, because a company like Yahoo believes they can plug something they like into their properties and get traction. Having traction already is proof that the product is great, and it commands a premium.

- Keeping it out of the wrong hands: yes, it's scary to imagine what would happen if a one-of-a-kind company fell into the hands of your competitor and they executed perfectly with it.

- Need to spend M/A budget: if you are the M/A person at a big company, your job is to buy what you can't build or hire. You can't say "there's nothing out there worth buying" because other people are buying companies (herd mentality if you will).

There are more factors, and there isn't a single one that determines a decision. A lot of people need to feel good about it and agree on the perceived risk and reward of the investment.

Re: What happens after Yahoo acquires you

#23

Post by petervandijck »

edw519 wrote: post #16
SandB0x wrote: post #6

I once witnessed the moment when the messenger from the new management team comes over to explain to the brilliant engineers who built the company up from nothing about these "timesheets" they need to fill in, and how it's "really not a big deal". You could feel something dying over the course of the conversation. It was one of the most uncomfortable things I've ever seen, and I'm sure it's far worse if you are one o…

Is there a right way to do this? Yes. a. Make it a fully owned subsidiary. b. Don't fuck with it.

That's what Google did with YouTube, right?

Re: What happens after Yahoo acquires you

#24

Post by kscaldef »

kenjackson wrote: post #13

So why does Yahoo buy these properties? While I'm sure we'd all like to think the decision makers at Yahoo since day 1 were all idiots who like to spend millions of dollars on companies and then let them die, but is there actually a rational reason? Were they trying to keep them out of the hands of Google? Did they do it purely for the eyeballs and thought with no additional spending they'd get their money back out o…

The article ignores the stories that turn out differently. For example, I noticed whereonearth in the list of acquisitions. I happen to know that their technology was nearly immediately used to start making money for Yahoo (because I integrated it into parts of the ad serving systems). It also was probably behind the "platform technology that enabled things like geolocation open API" that Upcoming enjoyed.

The time cutoff also leaves out the Overture, Inktomi, Altavista trio which made a ton of money for Yahoo, let them build a search engine on par with Google, and fueled significant growth of the company.

Finally, the article also ignores the fact than many, many internally developed products (of any internet company) have a lifespan of under 5 years.

Re: What happens after Yahoo acquires you

#25

Post by pasbesoin »

zdw wrote: post #17
SandB0x wrote: post #6

I once witnessed the moment when the messenger from the new management team comes over to explain to the brilliant engineers who built the company up from nothing about these "timesheets" they need to fill in, and how it's "really not a big deal". You could feel something dying over the course of the conversation. It was one of the most uncomfortable things I've ever seen, and I'm sure it's far worse if you are one o…

Sure. For every requirement created by the management people, it must create a datapoint that can be measured in terms of business success, as that's what they're there to foster. Employee morale should be one of these, and an important one in terms of obtaining and retaining talent. Changes that don't improve the business should be removed. If management can't provide improvement, management should be removed. It's…

I've witnessed numerous efforts to "measure" "morale". Couched in positive language, they inevitably ended up being increasingly bad efforts to paper over failure to address underlying (or over-arching) issues.

Here's a question: Why do you need timesheets? You didn't before. What's changed? If you can't -- legally -- avoid them, at least be honest about it. And don't let them become a tool for petty tyrants. (Oh, and, good luck with that last part.)

Re: What happens after Yahoo acquires you

#26

Post by steveklabnik »

vegashacker wrote: post #8

I'm surprised this is a common scenario. I would think, due to the pervasiveness of the sunk-cost fallacy, that companies would stand behind their aquisitions to a fault even--just cause they spent so much money on them.

No, no, you've got it all wrong. If the startup just takes advantage of all of the institutional process and knowledge that the acquirer has to offer, they'll do _even better_ than before they were acquired!

(This post is a good example of Poe's law...)

Re: What happens after Yahoo acquires you

#27

Post by paulbaumgart »

randall wrote: post #7

So what do we do? Obviously this sucks, but how do we build a company and get investors liquidity without Sarbanes-Oxley-riddled IPOs or Yahoo-level-incompetent acquisitions? Do we just keep being regular companies? Is there an alternative? How do we build things that matter (and require outside investment) and end in real change instead of just getting rich?

Apparently the very creative people at Goldman Sachs have some ideas.

Re: What happens after Yahoo acquires you

#28

Post by cletus »

kenjackson wrote: post #13

So why does Yahoo buy these properties? While I'm sure we'd all like to think the decision makers at Yahoo since day 1 were all idiots who like to spend millions of dollars on companies and then let them die, but is there actually a rational reason? Were they trying to keep them out of the hands of Google? Did they do it purely for the eyeballs and thought with no additional spending they'd get their money back out o…

> So why does Yahoo buy these properties?

Why does Yahoo do anything? It's clearly a company without a vision or purpose that is simply shuffling money and paper around in the hopes that onlookers mistake activity for achievement as the executives hope the kick the can down the street just past the next executive pay review and/or contract extension.

Re: What happens after Yahoo acquires you

#29

Post by bigbang »

There are 2 companies which Yahoo! acquired:

1) Overture. If you look at the financial reports, nearly 50% of Yahoo's revenue is from search. They acquired Overture for ~1B

2) They acquired RocketMail (essentially Yahoo! mail). Most people I know, when they think of Yahoo, they think of Yahoo! mail.

So, while its easy to say they messed up many acquisitions (esp the infamous 3B offer for Broadcast.com), the 2 acquisitions they made is what keeps them "in the game" today. You win some acquisitions, you lose some. Just like investing, if you make few smart ones, it can easily pay off and create more value than the money spent on many failed ones. Same with Google - Youtube was handled very well, but many acquisitions are essentially just shut down or never integrated into other products(Dodgeball,Jaiku etc)

Re: What happens after Yahoo acquires you

#30

Post by qeorge »

kenjackson wrote: post #13

So why does Yahoo buy these properties? While I'm sure we'd all like to think the decision makers at Yahoo since day 1 were all idiots who like to spend millions of dollars on companies and then let them die, but is there actually a rational reason? Were they trying to keep them out of the hands of Google? Did they do it purely for the eyeballs and thought with no additional spending they'd get their money back out o…

Without "growth" the stock tanks.
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