7 ms·

From what I’ve seen this is usually what happens when the parent company wants to close the service down. First they spin off the service into its own company t

by brad0 8y ago

From what I’ve seen this is usually what happens when the parent company wants to close the service down. First they spin off the service into its own company then the company shuts down because of a lack of income. Is that what’s happening here? What’s the name of this process?

chubot 8y ago
Counterexample: Reddit was acquired by Conde Nast and then spun out. Although honestly I am not a fan of the recent UI changes, which are presumably done for monetization. An explanation would be nice as I am mystified. I guess a redesign is a way to make more room for ads without making it completely obvious.
whalesalad 8y ago
Instapaper is an anomaly. It's been passed around like a stepchild since birth. I think there is a perceived-value fallacy around the number of people who use it or the intelligence that can be gleaned from knowing what people are bookmarking... but it looks like no one has been able to crack that nut. Every few years it gets passed to someone else. Nothing really ever changes... it just gets a new owner.
- dejv 8y ago
  It would be great to get insider info on why Pinterest thought it is great acquisition target. I never really understand the point of this deal.
- soneca 8y ago
  It changes. When Pinterest acquired, it offered all features for free for all users (it used to be a freemium model). I hope it doesnt change back, but I understand if they do. It's fair.
- paulcole 8y ago
  > It's been passed around like a stepchild since birth Didn't Marco create it and run it independently for over 5 years?
  - scarface74 8y ago
    He sold it around the time of the tumblr acquisition by Yahoo. Marco was the first employee of Tumblr and even though he didn’t work there at the time of the acquisition he made a few million off of the sale. I guess that gave him some runway to try new things. Besides, it seems like the team from Betaworks has been working on Instapaper since then.
    - paulcole 8y ago
      > It's been passed around like a stepchild since birth I'm not sure how your reply relates to the statement I was replying to? I looked it up on Marco's about page and he did run it for 5 years before selling it in 2013. https://marco.org/about https://marco.org/about I guess I don't see how that's "being passed around... since birth."
      - scarface74 8y ago
        He ran it for five years and then the team who ran it has been constant since then.
- deleted 8y ago
  [deleted]
appleiigs 8y ago
It is more like a management buyout. Management thinks they can do better as a stand-alone, and ownership wants to sell it. If a company puts a specific operation in its own legal entity, then it usually wants to sell it, or segregate risk, or for tax planning.
bthdonohue 8y ago
Hi Brad, Brian from Instapaper here. Just want to reassure you that's not the case here, we intend to operate Instapaper for the foreseeable future. We made this decision because we believe it’s best for both Pinterest and Instapaper.
- dfabulich 8y ago
  Why is this better for Pinterest and/or Instapaper? In the 2016 blog post announcing the acquisition: http://blog.instapaper.com/post/149374303661 http://blog.instapaper.com/post/149374303661 > All of these features and developments revolved around the core mission of Instapaper, which is allowing our users to discover, save, and experience interesting web content. In that respect, there is a lot of overlap between Pinterest and Instapaper. Joining Pinterest provides us with the additional resources and experience necessary to achieve that shared mission on a much larger scale. Is that no longer true? Was it ever true?
  - toomuchtodo 8y ago
    Synergies can turn out to not materialize post acquisition. Not a bad thing if the acquisition can be unraveled. Kudos to Pinterest for not just nuking Instapaper.
  - mbesto 8y ago
    M&A guy here - despite what finance people will say, a majority of acquisitions do not end up realizing their planned strategy.
    - ergothus 8y ago
      Good to know, but to this specific case, if someone (basically) says "This is not a spinoff to let it die, but to flourish on it's own", it's nice to have them explain why they are credible when they (or previous company rep) previously said "This is not a purchase to let it die, to but to flourish as part of the collective". Just give an actual reason why this time will be different. I already know not to trust M&A statements unless they give specific plans.
Illniyar 8y ago
Is it? Usually when a company wants to shut a service down they just do it. It's a lot of work to spin the company and losing talented people that they might want to keep.
danieldk 8y ago
From what I’ve seen this is usually what happens when the parent company wants to close the service down. Not always. Fastmail was bought (back) from Opera by employees and they are doing fine.
- brongondwana 8y ago
  Yes we are :) It's rare enough to be notable though. We enjoyed our time with Opera (especially me: I got to live in Oslo for 2 years), but there are definitely nice things about being independent and choose your own destiny. That and Opera was turning more into an advertising company, which wasn't a close fit with our existing user base. It's great to be in a position where we don't have split loyalties and "shadow customers" - leaving us able to focus on what's best for the people paying us for the service we provide.
  - philipodonnell 8y ago
    > It's great to be in a position where we don't have split loyalties and "shadow customers" - leaving us able to focus on what's best for the people paying us for the service we provide. I wish more companies adopted this approach to commerce.
paxys 8y ago
Are there examples of when this happened? In every case I can remember the parent company just shuts the service down.
Analemma_ 8y ago
This seems like the exact opposite of that. If Pinterest wanted Instapaper gone they'd just nuke it. I actually give them kudos for spinning it out and giving it a chance to survive, especially considering I was one of the cynical ones on the HN thread of the original announcement taking it as a given that Instapaper would get Incredible Journeyed.
bretpiatt 8y ago
That's not always the case, another anecdotal counter-point. I led the "independent" spin off of Jungle Disk from Rackspace 2.5 years ago now[1] and we're actively investing (more than 3x the R&D spend), growing our services, and making acquisitions of our own[2]. [1] https://therivardreport.com/jungle-disk-finds-a-home-in-downtown-tech-district/ https://therivardreport.com/jungle-disk-finds-a-home-in-down... [2] https://www.xconomy.com/texas/2017/12/05/jungle-disk-buys-canadian-data-backup-service-for-quickbooks-online/ https://www.xconomy.com/texas/2017/12/05/jungle-disk-buys-ca... / https://www.startupssanantonio.com/jungle-disk-announces-acquisition-of-teampassword/ https://www.startupssanantonio.com/jungle-disk-announces-acq...
sandworm101 8y ago
Look for how much debt the subsidiary is taking with them. The key advantage of such spinoffs, over just closing the doors, is that you can also spin away some red ink. You know things are doomed if the spunoff has either debts or onerous contractual obligations from the parent.

by brad0 8y ago

chubot 8y ago

Counterexample: Reddit was acquired by Conde Nast and then spun out. Although honestly I am not a fan of the recent UI changes, which are presumably done for monetization. An explanation would be nice as I am mystified. I guess a redesign is a way to make more room for ads without making it completely obvious.

whalesalad 8y ago

Instapaper is an anomaly. It's been passed around like a stepchild since birth. I think there is a perceived-value fallacy around the number of people who use it or the intelligence that can be gleaned from knowing what people are bookmarking... but it looks like no one has been able to crack that nut. Every few years it gets passed to someone else. Nothing really ever changes... it just gets a new owner.

dejv 8y ago
It would be great to get insider info on why Pinterest thought it is great acquisition target. I never really understand the point of this deal.
soneca 8y ago
It changes. When Pinterest acquired, it offered all features for free for all users (it used to be a freemium model). I hope it doesnt change back, but I understand if they do. It's fair.
paulcole 8y ago
> It's been passed around like a stepchild since birth Didn't Marco create it and run it independently for over 5 years?
- scarface74 8y ago
  He sold it around the time of the tumblr acquisition by Yahoo. Marco was the first employee of Tumblr and even though he didn’t work there at the time of the acquisition he made a few million off of the sale. I guess that gave him some runway to try new things. Besides, it seems like the team from Betaworks has been working on Instapaper since then.
  - paulcole 8y ago
    > It's been passed around like a stepchild since birth I'm not sure how your reply relates to the statement I was replying to? I looked it up on Marco's about page and he did run it for 5 years before selling it in 2013. https://marco.org/about https://marco.org/about I guess I don't see how that's "being passed around... since birth."
    - scarface74 8y ago
      He ran it for five years and then the team who ran it has been constant since then.
deleted 8y ago
[deleted]

appleiigs 8y ago

It is more like a management buyout. Management thinks they can do better as a stand-alone, and ownership wants to sell it. If a company puts a specific operation in its own legal entity, then it usually wants to sell it, or segregate risk, or for tax planning.

bthdonohue 8y ago

Hi Brad, Brian from Instapaper here. Just want to reassure you that's not the case here, we intend to operate Instapaper for the foreseeable future. We made this decision because we believe it’s best for both Pinterest and Instapaper.

dfabulich 8y ago
Why is this better for Pinterest and/or Instapaper? In the 2016 blog post announcing the acquisition: http://blog.instapaper.com/post/149374303661 http://blog.instapaper.com/post/149374303661 > All of these features and developments revolved around the core mission of Instapaper, which is allowing our users to discover, save, and experience interesting web content. In that respect, there is a lot of overlap between Pinterest and Instapaper. Joining Pinterest provides us with the additional resources and experience necessary to achieve that shared mission on a much larger scale. Is that no longer true? Was it ever true?
- toomuchtodo 8y ago
  Synergies can turn out to not materialize post acquisition. Not a bad thing if the acquisition can be unraveled. Kudos to Pinterest for not just nuking Instapaper.
- mbesto 8y ago
  M&A guy here - despite what finance people will say, a majority of acquisitions do not end up realizing their planned strategy.
  - ergothus 8y ago
    Good to know, but to this specific case, if someone (basically) says "This is not a spinoff to let it die, but to flourish on it's own", it's nice to have them explain why they are credible when they (or previous company rep) previously said "This is not a purchase to let it die, to but to flourish as part of the collective". Just give an actual reason why this time will be different. I already know not to trust M&A statements unless they give specific plans.

Illniyar 8y ago

Is it? Usually when a company wants to shut a service down they just do it. It's a lot of work to spin the company and losing talented people that they might want to keep.

danieldk 8y ago

From what I’ve seen this is usually what happens when the parent company wants to close the service down. Not always. Fastmail was bought (back) from Opera by employees and they are doing fine.

brongondwana 8y ago
Yes we are :) It's rare enough to be notable though. We enjoyed our time with Opera (especially me: I got to live in Oslo for 2 years), but there are definitely nice things about being independent and choose your own destiny. That and Opera was turning more into an advertising company, which wasn't a close fit with our existing user base. It's great to be in a position where we don't have split loyalties and "shadow customers" - leaving us able to focus on what's best for the people paying us for the service we provide.
- philipodonnell 8y ago
  > It's great to be in a position where we don't have split loyalties and "shadow customers" - leaving us able to focus on what's best for the people paying us for the service we provide. I wish more companies adopted this approach to commerce.

paxys 8y ago

Are there examples of when this happened? In every case I can remember the parent company just shuts the service down.

Analemma_ 8y ago

This seems like the exact opposite of that. If Pinterest wanted Instapaper gone they'd just nuke it. I actually give them kudos for spinning it out and giving it a chance to survive, especially considering I was one of the cynical ones on the HN thread of the original announcement taking it as a given that Instapaper would get Incredible Journeyed.

bretpiatt 8y ago

That's not always the case, another anecdotal counter-point. I led the "independent" spin off of Jungle Disk from Rackspace 2.5 years ago now[1] and we're actively investing (more than 3x the R&D spend), growing our services, and making acquisitions of our own[2]. [1] https://therivardreport.com/jungle-disk-finds-a-home-in-downtown-tech-district/ https://therivardreport.com/jungle-disk-finds-a-home-in-down... [2] https://www.xconomy.com/texas/2017/12/05/jungle-disk-buys-canadian-data-backup-service-for-quickbooks-online/ https://www.xconomy.com/texas/2017/12/05/jungle-disk-buys-ca... / https://www.startupssanantonio.com/jungle-disk-announces-acquisition-of-teampassword/ https://www.startupssanantonio.com/jungle-disk-announces-acq...

sandworm101 8y ago

Look for how much debt the subsidiary is taking with them. The key advantage of such spinoffs, over just closing the doors, is that you can also spin away some red ink. You know things are doomed if the spunoff has either debts or onerous contractual obligations from the parent.