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Actually this is a very common scheme in Silicon Valley -- public companies "throwing away" money on relatively worthless startups. It is a good way to siphon

Actually this is a very common scheme in Silicon Valley -- public companies "throwing away" money on relatively worthless startups. It is a good way to siphon money out of the stock market and into the pockets of VCs and founders -- and I would not be surprised if the person who pushes the acquisition gets a cut of the money too, or other "favors" in the future. The company knows its going to can the product and the founders will leave after their stock vests -- why else would it make the acquisition?

larrik 14y ago
That's a perspective that hadn't occurred to me (I'm not actually in startups or Silicon Valley). Sounds like a conspiracy theory, but it's believable. It does not, however, mean shareholders can't/shouldn't complain about throwing money away, though.
- gavanwoolery 14y ago
  Yep, it sounds like a conspiracy to me as well. :) The one thing that I have learned about corruption is that at least small instances of it occur everywhere, even if its not "the norm." Wherever there is way to make money, people might very well be doing it. And yes you are right although I tried to imply that shareholders were the ones being screwed - this is obviously unfair to shareholders, whether the transaction is corrupt or not.
- bitcartel 14y ago
  I'm sure Yahoo employees are asking questions too. $30 million could be spent on building daycare for all Yahoo mums and dads who can no longer work from home.
Evbn 14y ago
Seeing these acquisitions, it always seemed like that what's very often happening is the folks who make the Buy decisions (NOT the owners of the buying company) are basically stealing from then owners to hand money to their friends) Or, when the bizdev team is told to spend a billion dollars this year, (1) is is easier for them to like in extra money into each deal than to find more smaller deal, and (2) they don't get bonuses for only spending 500million and saying there is nothing else worth buying.
pbreit 14y ago
It might be something like that but with less malice. First, Summly and the entrepreneur are far from worthless. But to your point, a bunch of decent angel investors just got a pretty nice check from Yahoo. The "deal guy" builds some reputation but unlikely benefits monetarily in any nefarious way. I think the OP sentiment and many comments here are mostly classic HN resentment of success.
- gavanwoolery 14y ago
  I agree - sorry I think I should have chosen better wording. (Where I said "relatively worthless" I should have said "overly-valued")

larrik 14y ago

That's a perspective that hadn't occurred to me (I'm not actually in startups or Silicon Valley). Sounds like a conspiracy theory, but it's believable. It does not, however, mean shareholders can't/shouldn't complain about throwing money away, though.

gavanwoolery 14y ago
Yep, it sounds like a conspiracy to me as well. :) The one thing that I have learned about corruption is that at least small instances of it occur everywhere, even if its not "the norm." Wherever there is way to make money, people might very well be doing it. And yes you are right although I tried to imply that shareholders were the ones being screwed - this is obviously unfair to shareholders, whether the transaction is corrupt or not.
bitcartel 14y ago
I'm sure Yahoo employees are asking questions too. $30 million could be spent on building daycare for all Yahoo mums and dads who can no longer work from home.

Evbn 14y ago

Seeing these acquisitions, it always seemed like that what's very often happening is the folks who make the Buy decisions (NOT the owners of the buying company) are basically stealing from then owners to hand money to their friends) Or, when the bizdev team is told to spend a billion dollars this year, (1) is is easier for them to like in extra money into each deal than to find more smaller deal, and (2) they don't get bonuses for only spending 500million and saying there is nothing else worth buying.

pbreit 14y ago

It might be something like that but with less malice. First, Summly and the entrepreneur are far from worthless. But to your point, a bunch of decent angel investors just got a pretty nice check from Yahoo. The "deal guy" builds some reputation but unlikely benefits monetarily in any nefarious way. I think the OP sentiment and many comments here are mostly classic HN resentment of success.

gavanwoolery 14y ago
I agree - sorry I think I should have chosen better wording. (Where I said "relatively worthless" I should have said "overly-valued")