Comments on: ParentCos: Just Don’t Understand & That’s A Good Thing

By: Adam Metz

Adam Metz — Wed, 13 Jun 2007 17:51:24 +0000

One really relevant question that takes this a little bit further is what the acquisitions do to recruiting and the "cool factor" that the tiny HR departments at companies like Photobucket and Wallstrip have used as a recruiting tool since Day One.

Are they getting the same caliber of creative minds walking in the door that they were getting pre-acquisition?

By: rod/techfold.com

rod/techfold.com — Tue, 12 Jun 2007 19:32:41 +0000

I wrote my thoughts on these acquisitions here:

http://techfold.com/2007/05/30/im-becoming-a-curmudgeon/

In a nutshell:

The problem I see is one of memetic infection. Old companies with deep pockets impose old ideas and business models on new industries. Is Last.fm more likely to cave to things like the Copyright Royalty Board as a part of CBS? Yes. Does wrapping new ideas in a layer of old money ultimately stifle innovation? Yes. Sorry, Sam - even if CBS keeps their hands off, that’s not the same as being independent.

By: tim

tim — Tue, 12 Jun 2007 15:58:52 +0000

Maybe the cool to lame transition is inevitable, parentco or no? Like music and fashion, a younger generation will always seek to differentiate themselves by going elsewhere. Possibly, companies are being valued like tv technology when they are more like tv shows. I expect valuations will begin to come in line with more realistic life-span expectations.

By: Erik

Erik — Tue, 12 Jun 2007 06:35:33 +0000

We know ya love Van Om and Ian isn’t that far off the prices of real estate in certain areas but I would not give up my pad here for for anything. We are creating a groove here that you will not likely find anywhere else.

By: Om Malik

Om Malik — Tue, 12 Jun 2007 05:28:12 +0000

Hey boris, we love Vancouver, even though real estate prices are just like Silicon Valley. Or so we have heard from one Mr. Bell.

By: boris

boris — Tue, 12 Jun 2007 05:18:45 +0000

Off the beaten path Vancouver? Interesting phrase :P

If you mean "outside of the US bubble that most people can't see beyond" ... then yes.

My number one goal is to get a Yahoo engineering office back up here. Maybe a Google one, too. I mean, Cal loves Vancouver. Right, Cal?!!?

By: Craig

Craig — Tue, 12 Jun 2007 04:59:34 +0000

I recently met with a large portal at their headquarters to discuss a recent acquisition of theirs. In bragging about the critical mass they’ve just accrued in the Web 2.0 space, one of their best and brightest blurted out, “And we can’t wait to bring them in-fold!”

I think my mortified look across the table may have had them rethinking the strategy…

On a separate but equally relevant note, I had lunch with a member of the advertising press today who made an interesting observation regarding the CBS acquisition of Last.fm vs. the Facebook’s iLike service. Think CBS has buyer’s remorse yet?

By: Dave McClure

Dave McClure — Tue, 12 Jun 2007 04:49:54 +0000

on the other hand, looking at how eBay acquired PayPal (and other companies), over time the parent company does certainly impose its will on the young acquisition.

while this may vary from parent to parent and acquiree to acquiree, the basics looks like this:

1) if the child maintains a faster growth rate (users, page views, dollars, whatever) than its parent, it will have more freedom / control over its future.

2) if the child does not maintain a faster growth rate than its parent, or only manages to keep up, then it will quickly be overrun by the politics of its acquirer.

so the lesson learned here?

plan to lean forward, not back, after you've been acquired. unless you walk out the door with a big check & all your vesting completed, most of the real hard work comes after you've been acquired... and not before.

By: Marshall Kirkpatrick

Marshall Kirkpatrick — Tue, 12 Jun 2007 04:39:16 +0000

Interesting post, Liz.

By: Stephen

Stephen — Tue, 12 Jun 2007 02:18:16 +0000

Nice post. Large conglomerates often just don’t get it. Once they’ve bought it, the think that makes it worth buying will fade. The independnce and trust such sites have.

Cheers
steve