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Summary:

Blame it on the flu, but our PodSession for this week was recorded a couple of days later than usual. Niall popped in yesterday to try out the brand new gear Shure has loaned for the podcast, and hopefully you can tell the difference. Today’s edition […]

Blame it on the flu, but our PodSession for this week was recorded a couple of days later than usual. Niall popped in yesterday to try out the brand new gear Shure has loaned for the podcast, and hopefully you can tell the difference.

Today’s edition looks at all the buzz around selling out to larger competitors, and is titled, When to sell out. This is in many ways extension of what I wrote earlier for Business 2.0, Google Vs. The VCs. Yahoo is also taking a similar tact, and going down what some have dubbed, Acuhire! Also read, What do Google’s Deals Really Say?

But back to the topic of our podsession! Niall, who is normally the saner one in our conversations was animated yesterday, and blame that on too much coffee. But he defended the entrepreneurs admirably, and well, I was on the flip side.

There have been many high-profile acquisitions over the past year and every week there are new rumors about what big player should buy a startup and some of the deals eventually do happen. How are large players positioning themselves? Are startups shopping themselves around as acquisition targets, seeking partnerships, or planning for their own long-term success?

The entire podcast, When to sell out, is 23 minutes long, a 10.6 MB download.

Show Notes:

1.Yahoo! business development presentation to CalTech and MIT students.

2. Large companies such as Google or Yahoo! are essentially competing with the venture capital community.

3. Acquisition as talent acquisition. Comparison of today’s deals and Cisco’s M&A strategy

4. The built-to-flip mindset. Building to flip is building to flop.

5. Startups trying to replicate the past success of others and become a “me too” play.

6. What happens to a team after acquisition? Does the project stay in place and continue or is the team acquired for the talent and a few technologies before being integrated into existing teams? Del.icio.us and Yahoo! My Web as an example.

7. What types of talent would larger companies like to acquire? Who adds value?

8. There are more acquirers out there than Google, Yahoo!, and Microsoft.

And more fireworks inside. Download it directly, get it on iTunes or subscribe to our feed.

  1. Excellent and timely Podcast, Om. Immensely enjoyed listening to the debate. One quick point on the discussion. Neal talked about the dilemma entrepreneurs face–ie whether to raise capital from VCs, or get acquired by Big companies, to scale their business. Both have their pros and cons. While a big company can instantly provide you with the resources (manpower, capital etc), to scale, they can can also very easily kill your product (Niall’s point). Alternately, raising capital from VC also affects the destiny of the company, in that on some occasions, VCs may chose to infuse more and more capital into a company in the hope of making it into the next big thing ( say a Google, Yahoo, MS, or CISCO), thereby affecting the “exit by acquisition” prospects of the company. We have all heard of the tales in 1999 and 2000, where some VCs refused to accept attractive acquisition offers because they had the misplaced ambition of hitting a home run at the expense of the company.

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  2. [...] The Dynamic Duo (Om Malik and Niall Kennedy) ask this complex question in their latest podcast. A whole podcast? I got two words for you: early and often. [...]

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  3. [...] Last evening, Niall stopped by to record our latest PodSession. Along with him came Scott Johnson, who as we recorded our banter, proceeded to install Word-Press, and MySQL on my Powerbook. (Part of my grand plan to turn WordPress into a word-processor!) Like all geeks, Johnson carries a Treo 650 (when he should be using a Nokia, but never mind) and mid-way through our PodSession, his phone buzzed and he went into my bathroom. [...]

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  4. Nice podcast Om. Regarding the comment you made about Cisco’s pattern of buying small companies- they just broke the mould and bought SA for $7 bn. What was their motivation there? Recently there was another news that Cisco wants to get into the CE business. Maybe a few more acquisitions are coming up.

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  5. moo,

    i think linksys and SA and KISS are three deals that get them into the new markets. but their historical patterns haven’t changed all that much. I think they will make some plays. surely enough!

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