4 ms·

diversification is dirty? Really?

by mburns 15y ago

jcampbell1 15y ago
I mean buying a company that serves your competitors' content. And yes, diversification is also dirty. Diversification is the worst reason for companies to merge. If I wanted to own both Google and Ackamai, I could just buy shares in both companies. Investors should be responsible for diversification. There must be a reason that the combined companies are worth more for this acquisition to make sense. My thought is this will create negative value because major customers (MS/Apple/Facebook) don't want Google to see their traffic logs.
- 0x12 15y ago
  So, Larry Page wants to own Google and Akamai, he's already got plenty of google stock and a bag of money, and he's decided to buy shares in the other company. Why should he not be allowed to diversify but you would be? Companies can invest in other companies, the shareholders diversify indirectly. And if you don't agree, you can always sell your google stock. If MS/Apple/Facebook don't want google to look into their kitchen then they are of course entirely free to set up their own CDNs, and if they leave and you think that this will create negative value you can make a killing by shorting the stock. I'm not brave enough for that though, and I don't presume to know which way that will go.
  - bullseye 15y ago
    >> So, Larry Page wants to own Google and Akamai, he's already got plenty of google stock and a bag of money, and he's decided to buy shares in the other company. There is a pretty significant difference between Google buying Akamai with it's money and Larry Page buying it with his.
  - jcampbell1 15y ago
    > if they leave and you think that this will create negative value you can make a killing by shorting the stock. No you can't. Even if it turns out to be a disaster, it will only impact Google's stock price by roughly 5%. $5B is just noise in Google's market cap.
- mburns 15y ago
  Google bought (among others) DoubleClick, which was a direct competitor and served google's competitors. Or the ITA acquisition. Akamai has a large patent portfolio for streaming and content delivery and a long list of top-tier customers.

diversification is dirty? Really?

by mburns 15y ago

diversification is dirty? Really?

I mean buying a company that serves your competitors' content. And yes, diversification is also dirty. Diversification is the worst reason for companies to merge. If I wanted to own both Google and Ackamai, I could just buy shares in both companies. Investors should be responsible for diversification. There must be a reason that the combined companies are worth more for this acquisition to make sense. My thought is this will create negative value because major customers (MS/Apple/Facebook) don't want Google to see their traffic logs.

0x12 15y ago
So, Larry Page wants to own Google and Akamai, he's already got plenty of google stock and a bag of money, and he's decided to buy shares in the other company. Why should he not be allowed to diversify but you would be? Companies can invest in other companies, the shareholders diversify indirectly. And if you don't agree, you can always sell your google stock. If MS/Apple/Facebook don't want google to look into their kitchen then they are of course entirely free to set up their own CDNs, and if they leave and you think that this will create negative value you can make a killing by shorting the stock. I'm not brave enough for that though, and I don't presume to know which way that will go.
- bullseye 15y ago
  >> So, Larry Page wants to own Google and Akamai, he's already got plenty of google stock and a bag of money, and he's decided to buy shares in the other company. There is a pretty significant difference between Google buying Akamai with it's money and Larry Page buying it with his.
- jcampbell1 15y ago
  > if they leave and you think that this will create negative value you can make a killing by shorting the stock. No you can't. Even if it turns out to be a disaster, it will only impact Google's stock price by roughly 5%. $5B is just noise in Google's market cap.
mburns 15y ago
Google bought (among others) DoubleClick, which was a direct competitor and served google's competitors. Or the ITA acquisition. Akamai has a large patent portfolio for streaming and content delivery and a long list of top-tier customers.