Its very common these days, that big companies pry eyes upon smaller and prospective startups. And with a handful amount the acquire bargain continues until saturation, such that, either the acquiring company gives up, or the to be acquired gives up, or the both parties agrees to a financial give and take.
It isn’t that bad that a company / product gets acquired. And there are many success stories after the acquisition. However, few things come up in my mind very first, when I hear about any acquisition.
- The consumer base which belongs to the product being acquired.
- The future of the founders and staffs
- The amount estimated as worth for the product being acquired.
- The intention of acquiring company and the market competition of the same.
- The probable death of the product being acquired
These five points may not be everything, but atleast something to think before / after any acquisition.
The consumer base which belongs to the product being acquired.
If a product is running well, and has a significant consumer base, and it might be the best reason in most of the cases, for the acquiring company to take the decision. But, if any company acquires with some xyz intentions viz. either to put their hold on the founders and staffs or to hold a position in the market, the company might not dedicate its resource as much as the founders did during their difficult times. For example, I relied on a cloud service for few years. And some company acquired the service. After a year, the company said like this “We are shutting down the service, please transfer your data to some other provider. Please find instructions on how to migrate, here “. In such case, how can any consumer rely on any kind of product which eventually gets acquired, or awaits for it to be acquired in near future.
The future of the founders and staffs
Where will they work ? Because, its not necessary for the acquiring company to continue to bear any of them. Its totally dependent upon the their intentions on how to use the product in future. Founders may get a handful amount and get settled, or continue expanding the product. But staffs ?? Hmm.. Because, the input of staffs can’t be ignored.
The amount estimated as worth for the product being acquired.
Was the acquisition justified in terms of its evaluated worth. Most often mouth gets opened with the explanation OMG !!
The intention of acquiring company and the market competition of the same.
I somehow mentioned about this thing in the first and second point of argument. If the intention is just to down-makert any parallel company, or to acquire the product so that it won’t take its position in the future, or just to acquire the userbase to any parallel product that the acquiring company owns, what should I feel about the acquisition ? I won’t feel good again.
The probable death of the product being acquired
If four above mentioned points of argument may lead the product to a death at the end. Two best examples might be 1. Aardvark 2. Orkut. And both being Google. Google has already decided to shutdown Aardvark. And Orkut has been most unsuccessful products from Google. 3. Posterous has been recently acquired by Twitter and the first email I got was saying how to transfer to any other provider.
However, situations aren’t worst always. Google acquired Motorola Mobility and its probably doing best to improve its Android Platform. May be the acquisition has been helping both Android and Motorola Mobility.
Youtube had acquired some company which used to work on video rendering platform. And as per youtube, the acquisition was to improve youtube itself. To be noted, Youtube was acquired by Google and has been one of the most successful products under Google.
Lets hope this acquisition won’t despair in coming days.
Myself being a startup and working on a product, I might even wait for some kind of acquisition so that there will be an acknowledgement to what we have been trying 24×7 to make out as something viable rather than just a “Yet Another“.
Disclaimer: The author is not associated with any above mentioned companies. Neither he is associated with any companies parallel in the market competition with above mentioned companies. He neither endorses any of the above mentioned acquisitions, nor is against. He just wrote what he felt about and what he thinks of acquisition.
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