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Without arguing the merits of the Altera investment or divestment, a common pattern for Intel seems to be a wild see-sawing between an aggressive and a defensiv

• jrockway 2y ago
  This seems to be common for corporate America in general. I used to work at a YC startup. We kiiiiiinda maaaaaaaybe ran out of money (not my department) and happened to get bought by a large investor that also happens to be a US-based hardware manufacturer. Two years and countless reorgs later, they laid everyone off and as far as I know, are no longer in the business of selling the software products they bought. They never figured out how software worked, never had anyone managining the division for more than 6 months, and got bored. I think they thought by moving everyone over to Microsoft Word and Windows laptops (peppered with a half-hearted threat about RTO), they would just magically make billions of dollars the first month. It didn't happen. I am beginning to think M&A are just some sort of ego thing for bored megacorp execs, rather than serious attempts to add efficiency and value to the marketplace. (Prove me wrong, bored megacorp execs. I'll wait.)
  • aurumque 2y ago
    Having been through a few acquisitions myself, I think there is a perverse incentive where buying and destroying any competition (real or imagined) leads to positive enough outcomes that it doesn't matter if the underlying asset is destroyed. Nobody would come out and say that, but when an acquisition is tossed aside there may not be enough repercussions to prevent it from happening again.
    • timewizard 2y ago
      This is one of the main reasons we added anti monopoly provisions to our laws more than 100 years ago. Market dominance is a recognized factor in allowing this inversion of rewards to occur. That's the face of it. Labor is a market as well. The impacts of these arrangements on our labor pool is extraordinary. It's a massive displaced cost of allowing these types of mergers to occur born out by the people who stand to gain the least from the merging of business assets.
    • tinco 2y ago
      Intel bought a drone company that was producing the only drone that was good enough for my real estate inspection company to use. They acquired it and then killed it a year or two after. The inspection industry didn't have a proper drone for years after that until DJI started getting serious about it and produced the M30E. It was just senseless, Intel doesn't have real or imagined competition from a drone company, it wasn't even close to being in the same market. They just believed the hype about drones being the next big thing and when they found out they were too early they decided they didn't have the patience to wait for drones to become a thing and they killed it. There was no long term vision behind it.
      • throwaway2037 2y ago
        Wow, this post is really specific. What special hardware is required on a drone for "real estate inspection"?
        • andyferris 2y ago
          I believe it could be the weight of the camera and lens you would desire for good looking photos (think Sony a7 size). Good looking photos sell houses. EDIT I just noticed the “inspection” part. Maybe they wanted good zoom to spy on the tenants? (Or maybe that’s a really uncharitable take).
          • random_savv 2y ago
            To me, high quality photos for real estate inspection means (e.g.) being able to take high resolution photos of a specific part of the roof so you can understand why there’s a leak. Not having to climb is a big deal!
  • ethbr1 2y ago
    > I am beginning to think M&A are just some sort of ego thing for bored megacorp execs It seems like a low risk effort to put a promising inexperienced exec in charge of a recent acquisition. If they're a screw up and run it into the ground, imagine how much damage they could have done in a megacorp position of power. Megacorp saved (at the cost of a smaller company)
  • WeylandYutani 2y ago
    Is Intel still a mega corporation? That seems to be the real problem for Intel. Becoming prey.
  • deleted 2y ago
    [deleted]
• smallmancontrov 2y ago
  M&A churn is a way for management to monetize their power. Efficacy is a distant second concern.
  • kccqzy 2y ago
    How does management benefit from M&As? Sorry if this is a basic question. Do executives get paid based on the number of acquisitions?
    • nine_k 2y ago
      If I hold stock in a company, then my company acquires that company, the stock rises, and I liquidate my position in it after 6 months or whatever the cool-down period is, is this considered insider trading?
      • JoshTriplett 2y ago
        If you hold stock in company A, and your current company B acquires company A, that's not insider trading if you already owned the stock in company A before you had any information that company B was going to make that decision. It is, however, a conflict of interest for you to be involved in company B's acquisition of company A (e.g. influencing company B to buy company A), and might even rise to the level of a breach of your fiduciary duty to company B.
        • 3eb7988a1663 2y ago
          I know a woman who was part of a M&A team. On her first day, she was told her days of owning individual stocks in the industry were over. She could only purchase aggregate funds. Although, I do wonder if the same rules apply to the VPs who actually have to sign off on the deals.
      • wrs 2y ago
        Insider trading is all about information held by "insiders", not about who owns what. So it would depend on whether you know something material and nonpublic when you liquidate your position (e.g., you know the acquisition is going terribly and the acquiring company is going to write it off).
• wmf 2y ago
  And Intel's acquisitions kill off promising startups. At least Altera is being sort of spun off instead of outright destroyed.
• thunder-blue-3 2y ago
  Speaking from personal experience, many director-level and above positions at Intel, especially in growth related areas are filled through nepotism and professional connections. I've never seen a headline about Intel’s decline and thought, 'Wow, how could that happen?'
  • PaulHoule 2y ago
    I had a business partner that I agreed on a lot of things with but not about Intel. My assumption was that any small software package from Intel, such as a graph processing toolkit, was trash. He thought they could do no wrong. Intel really is good at certain kinds of software like compilers or MKL but my belief is that organizations like that have a belief in their "number oneness" that gets in their way of doing anything that it outside what they're good at. Maybe it is the people, processes, organization, values, etc. that gets in the way. Or maybe not having the flexibility to know that what is good at task A is not good at task B.
    • tharkun__ 2y ago
      See the funny thing is, even with all of this stuff about Intel that I hear about (and agree with as reported), I also just committed a cardinal sin just recently. I'm old, i.e. "never buy ATI" is something that I've stuck to since the very early Nvidia days. I.e. switched from Matrox and Voodoo to Nvidia while commiserating and witnessing friend's and colleagues ATI woes for years. The high end gaming days are long gone, even had a time of laptops where 3D graphics was of no concern whatsoever. I happened to have Intel chips and integrated graphics. Could even start up some gaming I missed out on during the years or replay old favourites just fine as even a business laptop Intel integrated graphics chip was fine for it. And then I bought an AMD based laptop with integrated Radeon graphics because of all that negative stuff you hear about Intel and AMD itself is fine, sometimes even better, so I thought it was fair to give it a try. Oh my was that a mistake. AMD Radeon graphics is still the old ATI in full blown problem glory. I guess it's going to be another 25 years until I might make that mistake again.
      • 2y ago
• nine_k 2y ago
  But, well, it was a ten-year bet: Altera was acquired in 2015. If they could not figure how to make it profitable, maybe somebody else should try. (Of course I don't think that the PE company is going to do just that.)
  • wtallis 2y ago
    It was a ten-year bet, but they spent the first several years actively sabotaging Altera by trying to move their whole product stack over to non-functional Intel fabs.
    • iaresee 2y ago
      ...and the majority of their internal development systems they used for all their chip design and layout.
  • dylan604 2y ago
    Doesn't purchase by a PE company pretty much guarantee the death of it? At least the selling off of the most profitable parts and pieces? Has there ever been a story of a PE purchase and the company grew under the new owner?
    • robert2020 2y ago
      PE’s buy companies to increase the company’s value then sell it. There’s been many successes. Powerschool, Hilton, Dunkin’ Brands, Dollar General, Beats by Dre, Petco, GoDaddy, BJ’s Wholesale Club, Neiman Marcus, Panera Bread, Allegro, Guitar Center, Nielsen, McAfee…
      • no_wizard 2y ago
        Most of these have very serious issues, especially with regards to labor violations and general treatment of employees.
      • bigfatkitten 2y ago
        > McAfee I wouldn't call that a roaring success. Funnily enough, Intel played a major role in running McAfee into the ground. With proper leadership, McAfee could've ended up in the position CrowdStrike is now. Trying not to piss off the Chinese government, and in particular its intelligence services (in order to sell chips) is unfortunately not a good model for an antimalware business.
• rqtwteye 2y ago
  Seems they should read Andy Grove’s books.
• ethbr1 2y ago
  > it’s a regular occurrence for Intel to announce a bold new venture to try to claim some new territory, and just as regular that they announce they’re halting that venture in the name of “consolidating” and “focusing on their core.” [...] [Intel's new thing's] expected lifespan is shorter than the average Google product. You got there in the end. You get the same outcome with the same corporate incentive. Both Intel and Google prioritize {starting something new} over {growing an existing thing}, in terms of corporate promotions and rewards, and therefore employees and leaders self-optimize to produce the repeated behavior you see. The way to fix this would be to decrease the rewards for starting a new thing and increase the rewards for evolving and growing an existing line of business.
  • dylan604 2y ago
    It's similar to sales vs dev in software. Sales are always prioritizing new features to attract new users instead of fixing the known issues that are pissing off your current users. New feature attracts new users and allows for fancy press releases. Nobody cares about press releases about an existing product getting a bug fix are become more stable. Our society is nothing but "ooh look, shiny!" type of short attention span
  • throwaway2037 2y ago
    > Both Intel and Google prioritize {starting something new} over {growing an existing thing}, in terms of corporate promotions and rewards, and therefore employees and leaders self-optimize to produce the repeated behavior you see. I cannot speak for Intel, but Google has done very well by "growing an existing thing" in AdWords and YouTube. Both account for the lion's share of profits. They are absolute revenue giants. Many have tried, and failed to chip away at that lead, but Google has managed to adapt over and over again.
    • 4gotunameagain 2y ago
      It is the only two things that google has regularly maintained, one of which with one of the biggest moats (youtube, the to go video service), and the other connected to the homepage of the internet. It's really hard to fuck these things up. Which they have been trying hard, given the state of youtube and the search engine.
• wombatpm 2y ago
  I worked for a former Fortune 300 company that had an active internal investment strategy. They wanted the next billion dollar business, guaranteed, in 12 months. And wanted to invest more than 1 million dollars. Sadly they are now bankrupt and owned by PE.
• evertedsphere 2y ago
  > a wild see-sawing between an aggressive and a defensive market posture tick, tock
• fredoralive 2y ago
  My personal theory is that desktop / laptop / server x86 (usually) is such a giant money printer that a) Intel can invest in anything (Altera, antivirus, Optane...) but b) when they do, they quickly realise that this isn't a giant profit margin machine like x86, so why bother?
• bigfatkitten 2y ago
  They fuck their customers when they do that. A good friend of mine had a product designed around Quark that was about to go into production when Intel pulled the rug out from under him.
• apercu 2y ago
  It could just be a stock play.. Need the stock to move up? Buy a company. Stock down again? Sell the company you bought 2 years ago. From the top to the bottom the problem with late stage capitalism is misaligned incentives. Edit: I wrote "the problem" and I should have written "among the many, many problems"