12 ms·

What happens after Yahoo acquires you (2011)

225 points by ph0rque 13y ago

AtTheLast 13y ago
Mayer is a product person, so it will be interesting to see how things work out.
simonbarker87 13y ago
At the risk of getting slammed by everyone, the evidence goes against starting a company, yet people still do it. The evidence goes against selling to a big co, yet people still do it to pay back investors and for the founders to release some cash. I know 37 Signals advocate not strapping the VC bomb to your back but once you have, your options are limited and if Yahoo offer the best deal I guess you take it...
hncommenter13 13y ago
Of that list, I'd say the Alibaba + RightMedia acquisitions were worth it. They're huge portions of the remaining value of the company. However, in general I agree with the post: Yahoo's corporate development group and its management teams over the years have spent billions of dollars on acquisitions that have largely not panned out. That this resulted in founder defections and shuttered products is not entirely surprising.
acangiano 13y ago
(2011) should be added to the title.
127001brewer 13y ago
I was not aware of the "Exit Interview"[1] series of posts and, so far, there has been some good content. [1] http://www.google.com/search?q=%22Exit+Interview%22&sitesearch=37signals.com/svn http://www.google.com/search?q=%22Exit+Interview%22&site...
mattmaroon 13y ago
It's not really useful to look at a bunch of (relatively) small acquisitions made by a Yahoo run by very different people almost a decade ago and try to extrapolate anything from it today. I don't think anyone would disagree Yahoo has been horribly mismanaged over the years. That at least may not be the case now. More useful is to look at large, more recent purchases like Alibaba and Right Media which are doing quite well. A company is far more likely to let a $35m acquisition slip down the drain than a $1b one.
- jeroen 13y ago
  I agree, but the writer wasn't extrapolating to today. The article is more than 2 years old. Bartz was still running Yahoo!
  - tlrobinson 13y ago
    True, but whoever posted it to Hacker News right after it was announced Yahoo is buying Tumblr certainly was.
    - eternalbasileus 13y ago
      Right - my thought, too. Especially coming from one of those companies that was acquired after the article was published. It hasn't all been roses, but we haven't been left to wither, either.
  - prawn 13y ago
    Writer wasn't, but was the submitter?
  - mattmaroon 13y ago
    Even still, there had been numerous CEO changes at that point. Koogle, Semel, Yang, Bartz. And even with the same CEO, there's a difference between a $30m acquisition and a $1b.
scottshea 13y ago
I think often times large companies purchase smaller ones because they cannot come up with new ideas on their own. Not that they are stupid but that the bureaucracy is too heavy for an idea to germinate into something big. That same layer of bureaucracy and deadweight that keeps ideas from forming will also crush a new acquisition. The people at the large company are good at maintaining; not growing or inventing. Their nature fights new ideas and new methods.
- leoedin 13y ago
  Definitely. The large company I work for talks and talks about innovation, but the truth is very little actually happens. The big flexibility that comes with a new company is what creates disruptive technologies. It's worth remembering that large companies don't always ruin their purchases. There will inevitably be a painful culture merging process after an acquisition (normally at the expense of the purchased company), but sometimes that process doesn't kill the purchased company. The resources and experience that a large company have can often take an almost-product the extra lengths required to be marketed.
davidw 13y ago
You take the money and create a fantastically successful startup/incubation/seed funding program? Sounds good to me.
- deleted 13y ago
  [deleted]
- eroslaw 13y ago
  And yet, you can't always swap a startup built with one's own hands with a bunch of others, just as one's child is not tradable for a bunch of other kids. Some founders might view their startups as pure investments, but I'd wager that more often than not, they view it as their child.
  - davidw 13y ago
    Startups are businesses intended to make money. Kids are kids. While you may feel an attachment to the former, there may come a time when selling is the best strategy. With kids, that's generally frowned upon.
stinkytaco 13y ago
Though I am as sad as anyone that Yahoo! effectively killed several good companies (Flickr and Delicious top my list of unfortunate casualties), I'd like to point out a couple of things. First of all, when Yahoo, Google or any large company acquires a product, they don't necessarily do it for the product, but possibly for other technology. The goals of the acquiring company, the founders and the users are not necessarily aligned. This doesn’t mean the acquisition is bad for the company or founder, just bad for the users of the product or possibly for the founders if it goes in a direction he or she didn't like. Second of all, founders leave for all sorts of reasons. It seems like some of these founders were frustrated by Yahoo!, but I have a feeling that founders in general would be frustrated by working for anyone in general. There's a personality that starts companies and there’s a personality that works for them.
- smiler 13y ago
  And thirdly, Yahoo did not force any of these companies to sell to Yahoo. Yahoo made an offer and they accepted.
- jacquesm 13y ago
  Flickr killed?
- drgath 13y ago
  Flickr is dead? Not quite. There's a Flickr press event in NYC happening later this afternoon (5 EST), so expect some announcements. Live stream @ http://screen.yahoo.com/yahoo-event-155000760.html http://screen.yahoo.com/yahoo-event-155000760.html
  - timrogers 13y ago
    Is there actually any hard evidence that the event has any relation to Flickr?
  - SatvikBeri 13y ago
    Flickr was essentially killed. Yahoo is now trying to bring it back to life. Based on a completely unscientific survey of my friends it seems to be working.
bdcravens 13y ago
Someone buys my house, but asks me to live in it and care for it. I then live it in like I've lived for years. One day they show up and chop down the tree I planted with my child when they were young, and change the color of the paint. "What are you doing?! Do you know how much passion I've put into this property?" "Who cares? It doesn't belong to you anymore, and you've got a pretty decent chunk of change in the bank."
- timjahn 13y ago
  Beautiful analogy.
- mseebach 13y ago
  That's a poor analogy. The goal of a business is ultimately to make money. The goal of a family home is completely different. You sell your business because you believe the exit represents some version of reaching your goal running the business (if your goal is to run the business, just don't sell it). I don't see any analogous reason to sell your family home (you might be forced to for financial reasons, but that's not why either of the mentioned start-ups sold, nor is such a sale likely to leave you with much money in the bank).
  - usea 13y ago
    The goal of a business is to make money. However, individuals have their own goals. Sometimes a cofounder's goal is simply to create value by making a product or service that people enjoy. The home was bought, but the occupants still want to see the home flourish.
    - anon808 13y ago
      The goal of a business is no more to make money, than breathing is the goal of a human.
      - jakerocheleau 13y ago
        Now that's an interesting analogy.
SpiderRide 13y ago
But this time its Marissa Mayer and i expect some good results from her. Finger Crossed X.
deleted 13y ago
[deleted]
tomasien 13y ago
Please add (2011) to the title. It's really important to understand this wasn't written to contextualize this ac.
ryguytilidie 13y ago
Maybe I'm insane, but when someone says "is the cash worth it to these founders?" when they presumably have the ability to do another startup AND they now have enough money to finance 100 startups and 3 generations of their family, I have to say a very strong yes.
- mseebach 13y ago
  The examples discussed in the article are in the 1-2 figures $millions range. The Tumblr deal is two orders of magnitude of that. The article is perfectly justified in asking that question of those acquisitions - I have no idea how much cash the Flickr founders walked off with in the end (after VC and early employees got their shares), but there's a reasonable scenario in which they would have made it much bigger on their own.
  - fifthcolumnist 13y ago
    Exactly. You have to look at your current income, expected future income, and what you would do after a sale. Could you catch lightning in a bottle again? How long would that take? Would you be OK going back to being just an employee somewhere? It may sound kind of odd, but a low million(s) isn't nescesarily a lot of money if you intent on retiring in a certain lifestyle.
- kyro 13y ago
  You're not insane, and I often wonder about how others can criticize someone for accepting such a colossal life-changing offer. If a company were offering me a billion (or $35 million) dollars for my startup provided I delete all user accounts and data and shut down the entire service forever, I'd still take that deal. People will moan about it for days, but a year out they'll have found some other service and I'll be driving around Rome in my r8 dressed as Da Vinci eating as much of the world's best pizza as my stomach can handle, for the rest of my life.
  - adsr 13y ago
    I think this is especially true for a startup that makes little to no money, and where the users pay $0. If the users complain, just offer a refund. :)
runjake 13y ago
This article is two years old, sure. But now Mayer, who I respect a lot, is at the helm. So what's happened to these older, still-viable acquisitions? Virtually nothing. A new iOS app here and there. Flickr and Delicious are wasting away. I can't help but think that Yahoo's destined-to-fail social network is in the wings. Instead of a @ or + name, it'll be a ! name. Marissa's there, but is there any real progress happening?
- redler 13y ago
  Maybe they'll call it "Bang!"
  - whaevr 13y ago
    Well, if they want to stay with the ! theme how about something along the lines of !AnotherStagnantProductFailure
- Isofarro 13y ago
  Yahoo sold delicious 2 years ago: http://techcrunch.com/2011/04/27/yahoo-sells-delicious-to-youtube-founders/ http://techcrunch.com/2011/04/27/yahoo-sells-delicious-to-yo... And killed their social network about 4 years ago: http://en.wikipedia.org/wiki/Yahoo!_360° http://en.wikipedia.org/wiki/Yahoo!_360° And they tried a Facebook partnership that kinda went sour after Yahoo attacked them with patents last year: http://techcrunch.com/2012/07/06/yahoo-facebook-patent/ http://techcrunch.com/2012/07/06/yahoo-facebook-patent/
  - drgath 13y ago
    > after Yahoo attacked them with patents last year While that statement is true, worth noting that the Y! CEO who did attack Facebook was fired shortly after and one of Marissa's first moves was to make amends with Facebook.
tokenadult 13y ago
Hacker News founder Paul Graham (pg) wrote in August 2010 about his experiences after his company Viaweb was acquired by Yahoo in 1998. http://paulgraham.com/yahoo.html http://paulgraham.com/yahoo.html He makes an explicit comparison between Yahoo and Google in his essay. Anyone looking at the strategy of large companies acquiring smaller companies might want to look at pg's essay as one more set of data points about what could happen after an acquisition.
- rocky1138 13y ago
  Note this little nugget in the footnotes: [2] In theory you could beat the death spiral by buying good programmers instead of hiring them. You can get programmers who would never have come to you as employees by buying their startups. But so far the only companies smart enough to do this are companies smart enough not to need to.
frozenport 13y ago
There is also a story here about Yahoo's loss.
ExpiredLink 13y ago
What happened to Informix, BEA, SUN, ...? There is nothing special in the Yahoo acquisitions. Large companies buy marked-share, mind-share, users. The actual product or service often is of little interest to them.
venomsnake 13y ago
Are there any success stories - when a service is acquired and then developed and grown properly and come out in the black? I can think of only blogger.
- jonnathanson 13y ago
  Reddit has been pretty un-fucked-around-with by Conde Nast's parent company since its acquisition. (It's been split off from CN as a separate business entity, but even during CN's stewardship, the messing around was very minimal). It's debatable exactly how much money Reddit makes, and whether it could be considered "in the black." But it's a success story in as much as the site's userbase and traffic have grown, and the core service has not been tampered with.
  - alipang 13y ago
    It's not profitable, at least it wasn't six months ago, and very likely is not today. http://www.reddit.com/r/blog/comments/12v8y3/now_is_the_time_to_invest_in_gold/c6yfbuh http://www.reddit.com/r/blog/comments/12v8y3/now_is_the_time...
- davros 13y ago
  Youtube
beat 13y ago
Finally, an INTERESTING article about the Yahoo/Tumblr thing.
- mbreese 13y ago
  Except this isn't about Yahoo/Tumblr... this was written years ago. It might still be relevant, but given the new leadership at Yahoo, it might not apply anymore. At least, one can hope.
  - beat 13y ago
    Well, why was it posted to HN in the first place? Because of the Yahoo/Tumblr sale. That makes it relevant.
    - mbreese 13y ago
      Its a relevant story, but the conclusions may not be relevant to the Tumblr purchase. Why? Because the context that was written in has shifted. Yahoo is a different place with different management now. A significant amount of time has passed, so things might be different now. The only question is: is Yahoo different enough to not screw this up? And that's not something that can be answered any time soon. Given how they've treated things so far, it seems like they've learned some lessons from the (ahem) 'successes' of their prior acquisitions.
brudgers 13y ago
If you are your business, the likelihood that your business will be lost in a conglomerate is relevant. On the other hand, what happens to you as a person after Yahoo acquires your business is an entirely different matter. Those mentioned in the article have had a life after Yahoo acquisition. A little Googling provides anecdotal evidence that getting purchased had a significant long term impact. Likewise, passing through a Yahoo buyout helped create the arc of Paul Graham's career.
- daniel-cussen 13y ago
  And it's worth pointing out, Paul Graham's product is still around and/because it made a lot of money for Yahoo over the years. http://store.yahoo.com http://store.yahoo.com
  - brudgers 13y ago
    Unlike Fliker or Tumblr, the monetization strategy was obvious.
gasu 13y ago
Anyone wanna speculate on what Yahoo's going to do with Tumblr?
moomoo12345 13y ago
different time, different management via ex-googler.
- afkovacs 13y ago
  Agreed, it would be more instructive to look to the acquisitions that shaped Marissa and board members like Max Levchin, Maynard Webb (Yahoo), and Roelof Botha (Tumblr)- YouTube, PayPal, perhaps Instagram. Surely top of mind and a big reason why Tumblr is staying independent.
sinzone 13y ago
In 2011, that was a different Yahoo.. Without Marissa as CEO
zan2434 13y ago
I feel as though some of these acquisitions represent not the purchase of something worth $x to Yahoo but rather the imperialism of traffic that costs $x to them, which are really the same thing but are rather different when viewed through the lens of shutdowns and stagnation. Yahoo is a content company, and content elsewhere means traffic elsewhere which is a loss for them. Facebook's purchase of Instagram, even if Instagram is shut down and loses all of its users is still worth the money if viewed through the lens of owning the traffic regardless.
axiom_prime 13y ago
Yahoo...where the internet goes to die
washedup 13y ago
This article misses the big point that there is a new CEO who may make different decisions regarding how to integrate a new company. Having a new CEO is enough to change the direction of a company (look at Apple), whether for good or bad. Of course, Mayer has yet to prove what difference she can make.
zethraeus 13y ago
It seems fairly clear that Yahoo needs to not mishandle Tumblr in this way, and that Mayer is totally aware that this is a large factor on which she will be judged. Maybe it's naive to think that a new CEO can cut through cultural and corporate cruft well enough to make this happen, but I think Mayer commands respect in a manner radically different to all but a few CEOs - especially among developers.
themylo 13y ago
“Acquisition should never be the goal. Build something people love, and build revenue to keep it sustainable. After that, the decision to sell is very personal.” He's right about that. At the same time, for the founders, especially selling for cash like tumblr, it would be silly for them not to accept the deal and get a couple hundred million each. The rest will get a decent bonus. The tech industry has a very short memory. It's ridiculous to see the same companies making the same mistakes year after year. Let's face it Yahoo, you've been a zombie for awhile now. I just wonder what the headshot will finally look like.
themylo 13y ago
“Acquisition should never be the goal. Build something people love, and build revenue to keep it sustainable. After that, the decision to sell is very personal.” He's right about that. At the same time, for the founders, especially selling for cash like tumblr, it would be silly for them not to accept the deal and get a couple hundred million each. The rest will get a decent bonus. The tech industry has a very short memory. It's ridiculous to see the same companies making the same mistakes year after year. Let's face it Yahoo, you've been a zombie for awhile now. I just wonder what the headshot will finally look like.
themylo 13y ago
“Acquisition should never be the goal. Build something people love, and build revenue to keep it sustainable. After that, the decision to sell is very personal.” He's right about that. At the same time, for the founders, especially selling for cash like tumblr, it would be silly for them not to accept the deal and get a couple hundred million each. The rest will get a decent bonus. The tech industry has a very short memory. It's ridiculous to see the same companies making the same mistakes year after year. Let's face it Yahoo, you've been a zombie for awhile now. I just wonder what the headshot will finally look like.
themylo 13y ago
“Acquisition should never be the goal. Build something people love, and build revenue to keep it sustainable. After that, the decision to sell is very personal.” He's right about that. At the same time, for the founders, especially selling for cash like tumblr, it would be silly for them not to accept the deal and get a couple hundred million each. The rest will get a decent bonus. The tech industry has a very short memory. It's ridiculous to see the same companies making the same mistakes year after year. Let's face it Yahoo, you've been a zombie for awhile now. I just wonder what the headshot will finally look like.
themylo 13y ago
“Acquisition should never be the goal. Build something people love, and build revenue to keep it sustainable. After that, the decision to sell is very personal.” He's right about that. At the same time, for the founders, especially selling for cash like tumblr, it would be silly for them not to accept the deal and get a couple hundred million each. The rest will get a decent bonus. The tech industry has a very short memory. It's ridiculous to see the same companies making the same mistakes year after year. Let's face it Yahoo, you've been a zombie for awhile now. I just wonder what the headshot will finally look like.
themylo 13y ago
“Acquisition should never be the goal. Build something people love, and build revenue to keep it sustainable. After that, the decision to sell is very personal.” He's right about that. At the same time, for the founders, especially selling for cash like tumblr, it would be silly for them not to accept the deal and get a couple hundred million each. The rest will get a decent bonus. The tech industry has a very short memory. It's ridiculous to see the same companies making the same mistakes year after year. Let's face it Yahoo, you've been a zombie for awhile now. I just wonder what the headshot will finally look like.
Gravityloss 13y ago
If you define text color, you should define background color as well. Otherwise you are making unfounded assumptions about the user's default background color. Of course I can always override the stylesheet.
chris_wot 13y ago
It could be worse. You might be acquired by EMC! You don't know pain and dissatisfaction until this happens to you.
marcamillion 13y ago
As of today, the first point in this post is already invalid. If Marissa Mayer keeps going like how she is, I suspect that this post will be fully invalid in 5 years. We would very well be witnessing the 2nd greatest tech turnaround after Apple - with Mayer.
- paulftw 13y ago
  can you please quote the 'first point in this post'?
  - marcamillion 13y ago
    The point of the first heading " Flickr was acquired by Yahoo in March ‘05 for $35M" - was to show that Flickr has been a failure ever since Yahoo bought it. Given the recent reboot and redesign, I doubt that will continue to be the case - hence my statement.
tzury 13y ago
The following list is even more fascinating http://en.wikipedia.org/wiki/List_of_acquisitions_by_AOL http://en.wikipedia.org/wiki/List_of_acquisitions_by_AOL
aquanext 13y ago
I think the redesign of flickr unveiled today makes this argument obsolete. It was true under the old Yahoo! ... this one is far more aggressive.
jroseattle 13y ago
"And customers are left holding the bag." Ok, let's dial down the drama here. I'm trying to understand the point, other than Yahoo has historically been a poor acquiring company. Shocker! Let's see...Delicious, MyBlogLog, Flickr, Upcoming. How many of these services had customers as opposed to users? I'm pretty sure we can substitute names of large tech companies and their acquisition lists here and have the article read the same way.

225 points by ph0rque 13y ago

Mayer is a product person, so it will be interesting to see how things work out.

At the risk of getting slammed by everyone, the evidence goes against starting a company, yet people still do it. The evidence goes against selling to a big co, yet people still do it to pay back investors and for the founders to release some cash. I know 37 Signals advocate not strapping the VC bomb to your back but once you have, your options are limited and if Yahoo offer the best deal I guess you take it...

hncommenter13 13y ago

Of that list, I'd say the Alibaba + RightMedia acquisitions were worth it. They're huge portions of the remaining value of the company. However, in general I agree with the post: Yahoo's corporate development group and its management teams over the years have spent billions of dollars on acquisitions that have largely not panned out. That this resulted in founder defections and shuttered products is not entirely surprising.

acangiano 13y ago

(2011) should be added to the title.

127001brewer 13y ago

I was not aware of the "Exit Interview"[1] series of posts and, so far, there has been some good content. [1] http://www.google.com/search?q=%22Exit+Interview%22&sitesearch=37signals.com/svn http://www.google.com/search?q=%22Exit+Interview%22&site...

mattmaroon 13y ago

It's not really useful to look at a bunch of (relatively) small acquisitions made by a Yahoo run by very different people almost a decade ago and try to extrapolate anything from it today. I don't think anyone would disagree Yahoo has been horribly mismanaged over the years. That at least may not be the case now. More useful is to look at large, more recent purchases like Alibaba and Right Media which are doing quite well. A company is far more likely to let a $35m acquisition slip down the drain than a $1b one.

jeroen 13y ago
I agree, but the writer wasn't extrapolating to today. The article is more than 2 years old. Bartz was still running Yahoo!
- tlrobinson 13y ago
  True, but whoever posted it to Hacker News right after it was announced Yahoo is buying Tumblr certainly was.
  - eternalbasileus 13y ago
    Right - my thought, too. Especially coming from one of those companies that was acquired after the article was published. It hasn't all been roses, but we haven't been left to wither, either.
- prawn 13y ago
  Writer wasn't, but was the submitter?
- mattmaroon 13y ago
  Even still, there had been numerous CEO changes at that point. Koogle, Semel, Yang, Bartz. And even with the same CEO, there's a difference between a $30m acquisition and a $1b.

scottshea 13y ago

I think often times large companies purchase smaller ones because they cannot come up with new ideas on their own. Not that they are stupid but that the bureaucracy is too heavy for an idea to germinate into something big. That same layer of bureaucracy and deadweight that keeps ideas from forming will also crush a new acquisition. The people at the large company are good at maintaining; not growing or inventing. Their nature fights new ideas and new methods.

leoedin 13y ago
Definitely. The large company I work for talks and talks about innovation, but the truth is very little actually happens. The big flexibility that comes with a new company is what creates disruptive technologies. It's worth remembering that large companies don't always ruin their purchases. There will inevitably be a painful culture merging process after an acquisition (normally at the expense of the purchased company), but sometimes that process doesn't kill the purchased company. The resources and experience that a large company have can often take an almost-product the extra lengths required to be marketed.

davidw 13y ago

You take the money and create a fantastically successful startup/incubation/seed funding program? Sounds good to me.

deleted 13y ago
[deleted]
eroslaw 13y ago
And yet, you can't always swap a startup built with one's own hands with a bunch of others, just as one's child is not tradable for a bunch of other kids. Some founders might view their startups as pure investments, but I'd wager that more often than not, they view it as their child.
- davidw 13y ago
  Startups are businesses intended to make money. Kids are kids. While you may feel an attachment to the former, there may come a time when selling is the best strategy. With kids, that's generally frowned upon.

stinkytaco 13y ago

Though I am as sad as anyone that Yahoo! effectively killed several good companies (Flickr and Delicious top my list of unfortunate casualties), I'd like to point out a couple of things. First of all, when Yahoo, Google or any large company acquires a product, they don't necessarily do it for the product, but possibly for other technology. The goals of the acquiring company, the founders and the users are not necessarily aligned. This doesn’t mean the acquisition is bad for the company or founder, just bad for the users of the product or possibly for the founders if it goes in a direction he or she didn't like. Second of all, founders leave for all sorts of reasons. It seems like some of these founders were frustrated by Yahoo!, but I have a feeling that founders in general would be frustrated by working for anyone in general. There's a personality that starts companies and there’s a personality that works for them.

smiler 13y ago
And thirdly, Yahoo did not force any of these companies to sell to Yahoo. Yahoo made an offer and they accepted.
jacquesm 13y ago
Flickr killed?
drgath 13y ago
Flickr is dead? Not quite. There's a Flickr press event in NYC happening later this afternoon (5 EST), so expect some announcements. Live stream @ http://screen.yahoo.com/yahoo-event-155000760.html http://screen.yahoo.com/yahoo-event-155000760.html
- timrogers 13y ago
  Is there actually any hard evidence that the event has any relation to Flickr?
- SatvikBeri 13y ago
  Flickr was essentially killed. Yahoo is now trying to bring it back to life. Based on a completely unscientific survey of my friends it seems to be working.

bdcravens 13y ago

Someone buys my house, but asks me to live in it and care for it. I then live it in like I've lived for years. One day they show up and chop down the tree I planted with my child when they were young, and change the color of the paint. "What are you doing?! Do you know how much passion I've put into this property?" "Who cares? It doesn't belong to you anymore, and you've got a pretty decent chunk of change in the bank."

timjahn 13y ago
Beautiful analogy.
mseebach 13y ago
That's a poor analogy. The goal of a business is ultimately to make money. The goal of a family home is completely different. You sell your business because you believe the exit represents some version of reaching your goal running the business (if your goal is to run the business, just don't sell it). I don't see any analogous reason to sell your family home (you might be forced to for financial reasons, but that's not why either of the mentioned start-ups sold, nor is such a sale likely to leave you with much money in the bank).
- usea 13y ago
  The goal of a business is to make money. However, individuals have their own goals. Sometimes a cofounder's goal is simply to create value by making a product or service that people enjoy. The home was bought, but the occupants still want to see the home flourish.
  - anon808 13y ago
    The goal of a business is no more to make money, than breathing is the goal of a human.
    - jakerocheleau 13y ago
      Now that's an interesting analogy.

SpiderRide 13y ago

But this time its Marissa Mayer and i expect some good results from her. Finger Crossed X.

deleted 13y ago

[deleted]

tomasien 13y ago

Please add (2011) to the title. It's really important to understand this wasn't written to contextualize this ac.

ryguytilidie 13y ago

Maybe I'm insane, but when someone says "is the cash worth it to these founders?" when they presumably have the ability to do another startup AND they now have enough money to finance 100 startups and 3 generations of their family, I have to say a very strong yes.

mseebach 13y ago
The examples discussed in the article are in the 1-2 figures $millions range. The Tumblr deal is two orders of magnitude of that. The article is perfectly justified in asking that question of those acquisitions - I have no idea how much cash the Flickr founders walked off with in the end (after VC and early employees got their shares), but there's a reasonable scenario in which they would have made it much bigger on their own.
- fifthcolumnist 13y ago
  Exactly. You have to look at your current income, expected future income, and what you would do after a sale. Could you catch lightning in a bottle again? How long would that take? Would you be OK going back to being just an employee somewhere? It may sound kind of odd, but a low million(s) isn't nescesarily a lot of money if you intent on retiring in a certain lifestyle.
kyro 13y ago
You're not insane, and I often wonder about how others can criticize someone for accepting such a colossal life-changing offer. If a company were offering me a billion (or $35 million) dollars for my startup provided I delete all user accounts and data and shut down the entire service forever, I'd still take that deal. People will moan about it for days, but a year out they'll have found some other service and I'll be driving around Rome in my r8 dressed as Da Vinci eating as much of the world's best pizza as my stomach can handle, for the rest of my life.
- adsr 13y ago
  I think this is especially true for a startup that makes little to no money, and where the users pay $0. If the users complain, just offer a refund. :)

runjake 13y ago

This article is two years old, sure. But now Mayer, who I respect a lot, is at the helm. So what's happened to these older, still-viable acquisitions? Virtually nothing. A new iOS app here and there. Flickr and Delicious are wasting away. I can't help but think that Yahoo's destined-to-fail social network is in the wings. Instead of a @ or + name, it'll be a ! name. Marissa's there, but is there any real progress happening?

redler 13y ago
Maybe they'll call it "Bang!"
- whaevr 13y ago
  Well, if they want to stay with the ! theme how about something along the lines of !AnotherStagnantProductFailure
Isofarro 13y ago
Yahoo sold delicious 2 years ago: http://techcrunch.com/2011/04/27/yahoo-sells-delicious-to-youtube-founders/ http://techcrunch.com/2011/04/27/yahoo-sells-delicious-to-yo... And killed their social network about 4 years ago: http://en.wikipedia.org/wiki/Yahoo!_360° http://en.wikipedia.org/wiki/Yahoo!_360° And they tried a Facebook partnership that kinda went sour after Yahoo attacked them with patents last year: http://techcrunch.com/2012/07/06/yahoo-facebook-patent/ http://techcrunch.com/2012/07/06/yahoo-facebook-patent/
- drgath 13y ago
  > after Yahoo attacked them with patents last year While that statement is true, worth noting that the Y! CEO who did attack Facebook was fired shortly after and one of Marissa's first moves was to make amends with Facebook.

tokenadult 13y ago

Hacker News founder Paul Graham (pg) wrote in August 2010 about his experiences after his company Viaweb was acquired by Yahoo in 1998. http://paulgraham.com/yahoo.html http://paulgraham.com/yahoo.html He makes an explicit comparison between Yahoo and Google in his essay. Anyone looking at the strategy of large companies acquiring smaller companies might want to look at pg's essay as one more set of data points about what could happen after an acquisition.

rocky1138 13y ago
Note this little nugget in the footnotes: [2] In theory you could beat the death spiral by buying good programmers instead of hiring them. You can get programmers who would never have come to you as employees by buying their startups. But so far the only companies smart enough to do this are companies smart enough not to need to.

frozenport 13y ago

There is also a story here about Yahoo's loss.

ExpiredLink 13y ago

What happened to Informix, BEA, SUN, ...? There is nothing special in the Yahoo acquisitions. Large companies buy marked-share, mind-share, users. The actual product or service often is of little interest to them.

venomsnake 13y ago

Are there any success stories - when a service is acquired and then developed and grown properly and come out in the black? I can think of only blogger.

jonnathanson 13y ago
Reddit has been pretty un-fucked-around-with by Conde Nast's parent company since its acquisition. (It's been split off from CN as a separate business entity, but even during CN's stewardship, the messing around was very minimal). It's debatable exactly how much money Reddit makes, and whether it could be considered "in the black." But it's a success story in as much as the site's userbase and traffic have grown, and the core service has not been tampered with.
- alipang 13y ago
  It's not profitable, at least it wasn't six months ago, and very likely is not today. http://www.reddit.com/r/blog/comments/12v8y3/now_is_the_time_to_invest_in_gold/c6yfbuh http://www.reddit.com/r/blog/comments/12v8y3/now_is_the_time...
davros 13y ago
Youtube

beat 13y ago

Finally, an INTERESTING article about the Yahoo/Tumblr thing.

mbreese 13y ago
Except this isn't about Yahoo/Tumblr... this was written years ago. It might still be relevant, but given the new leadership at Yahoo, it might not apply anymore. At least, one can hope.
- beat 13y ago
  Well, why was it posted to HN in the first place? Because of the Yahoo/Tumblr sale. That makes it relevant.
  - mbreese 13y ago
    Its a relevant story, but the conclusions may not be relevant to the Tumblr purchase. Why? Because the context that was written in has shifted. Yahoo is a different place with different management now. A significant amount of time has passed, so things might be different now. The only question is: is Yahoo different enough to not screw this up? And that's not something that can be answered any time soon. Given how they've treated things so far, it seems like they've learned some lessons from the (ahem) 'successes' of their prior acquisitions.

brudgers 13y ago

If you are your business, the likelihood that your business will be lost in a conglomerate is relevant. On the other hand, what happens to you as a person after Yahoo acquires your business is an entirely different matter. Those mentioned in the article have had a life after Yahoo acquisition. A little Googling provides anecdotal evidence that getting purchased had a significant long term impact. Likewise, passing through a Yahoo buyout helped create the arc of Paul Graham's career.

daniel-cussen 13y ago
And it's worth pointing out, Paul Graham's product is still around and/because it made a lot of money for Yahoo over the years. http://store.yahoo.com http://store.yahoo.com
- brudgers 13y ago
  Unlike Fliker or Tumblr, the monetization strategy was obvious.

gasu 13y ago

Anyone wanna speculate on what Yahoo's going to do with Tumblr?

moomoo12345 13y ago

different time, different management via ex-googler.

afkovacs 13y ago
Agreed, it would be more instructive to look to the acquisitions that shaped Marissa and board members like Max Levchin, Maynard Webb (Yahoo), and Roelof Botha (Tumblr)- YouTube, PayPal, perhaps Instagram. Surely top of mind and a big reason why Tumblr is staying independent.

sinzone 13y ago

In 2011, that was a different Yahoo.. Without Marissa as CEO

zan2434 13y ago

I feel as though some of these acquisitions represent not the purchase of something worth $x to Yahoo but rather the imperialism of traffic that costs $x to them, which are really the same thing but are rather different when viewed through the lens of shutdowns and stagnation. Yahoo is a content company, and content elsewhere means traffic elsewhere which is a loss for them. Facebook's purchase of Instagram, even if Instagram is shut down and loses all of its users is still worth the money if viewed through the lens of owning the traffic regardless.

axiom_prime 13y ago

Yahoo...where the internet goes to die

washedup 13y ago

This article misses the big point that there is a new CEO who may make different decisions regarding how to integrate a new company. Having a new CEO is enough to change the direction of a company (look at Apple), whether for good or bad. Of course, Mayer has yet to prove what difference she can make.

zethraeus 13y ago

It seems fairly clear that Yahoo needs to not mishandle Tumblr in this way, and that Mayer is totally aware that this is a large factor on which she will be judged. Maybe it's naive to think that a new CEO can cut through cultural and corporate cruft well enough to make this happen, but I think Mayer commands respect in a manner radically different to all but a few CEOs - especially among developers.

themylo 13y ago

“Acquisition should never be the goal. Build something people love, and build revenue to keep it sustainable. After that, the decision to sell is very personal.” He's right about that. At the same time, for the founders, especially selling for cash like tumblr, it would be silly for them not to accept the deal and get a couple hundred million each. The rest will get a decent bonus. The tech industry has a very short memory. It's ridiculous to see the same companies making the same mistakes year after year. Let's face it Yahoo, you've been a zombie for awhile now. I just wonder what the headshot will finally look like.

themylo 13y ago

Gravityloss 13y ago

If you define text color, you should define background color as well. Otherwise you are making unfounded assumptions about the user's default background color. Of course I can always override the stylesheet.

chris_wot 13y ago

It could be worse. You might be acquired by EMC! You don't know pain and dissatisfaction until this happens to you.

marcamillion 13y ago

As of today, the first point in this post is already invalid. If Marissa Mayer keeps going like how she is, I suspect that this post will be fully invalid in 5 years. We would very well be witnessing the 2nd greatest tech turnaround after Apple - with Mayer.

paulftw 13y ago
can you please quote the 'first point in this post'?
- marcamillion 13y ago
  The point of the first heading " Flickr was acquired by Yahoo in March ‘05 for $35M" - was to show that Flickr has been a failure ever since Yahoo bought it. Given the recent reboot and redesign, I doubt that will continue to be the case - hence my statement.

tzury 13y ago

The following list is even more fascinating http://en.wikipedia.org/wiki/List_of_acquisitions_by_AOL http://en.wikipedia.org/wiki/List_of_acquisitions_by_AOL

aquanext 13y ago

I think the redesign of flickr unveiled today makes this argument obsolete. It was true under the old Yahoo! ... this one is far more aggressive.

jroseattle 13y ago

"And customers are left holding the bag." Ok, let's dial down the drama here. I'm trying to understand the point, other than Yahoo has historically been a poor acquiring company. Shocker! Let's see...Delicious, MyBlogLog, Flickr, Upcoming. How many of these services had customers as opposed to users? I'm pretty sure we can substitute names of large tech companies and their acquisition lists here and have the article read the same way.