If you build something of strategic value to a big player, they'll pay more for it than the present value of its expected cash flows. They're expecting improve

If you build something of strategic value to a big player, they'll pay more for it than the present value of its expected cash flows. They're expecting improvements in cash flow in other, non-competing products, which they can realize but which the original product will never see. Big players will "overpay" for something of strategic importance. So if the hope is that buying small products will free you from the big players, yeah, that was always dubious, at least in the corners interesting to those players. On the other hand, Sparrow got built, didn't it? And whatever you liked about it just got a big fat Market Stamp Of Approval. It wouldn't be surprising for similar features to start appearing in other mail clients, some of them open source. Maybe someone will build Sparrow The Sequel ("Google didn't get every egg in the nest . . ."). VCs just got more interested in pitches for email software. How much this matters depend on what you want. If you want freedom from "you are the product", the complaint makes more sense to me. But if what you want is more innovation, well, Sparrow's DNA just demonstrated its ability to generate returns. And returns on innovation more generally have been validated. So it isn't clear to me that buying Sparrow "failed" to push innovation forward.