Jake Lodwick, co-founder of College Humor and Vimeo, writes about how poorly the acquisition process can go and how it seems to happen over and over and over in our industry in An acquisition is always a failure:
The party ended in 2006, when we sold our company to IAC, a conglomerate owned by media mogul Barry Diller. Bit by bit, the youthful energy that created so much value was siphoned off. Whereas we’d once been free to work on whatever seemed interesting, we now found ourselves in vaguely defined middle-management roles, sitting through pointless meetings where older doofuses who didn’t understand the Web challenged our intuitions and trivialized our ambitions.
"Always" is tough to swallow. It is unfortunate how often it seems that acquisitions of products, teams, and entire businesses go poorly. Even taking years to fizzle out.
I think the biggest loss for everyone involved is the potential for what the product would have become, what the team would have done on their own, or what the company would have accomplished if they hadn't been acquired.
Would Flickr have been better off without Yahoo!? Would Brightkite have beaten Gowalla and Foursquare? Would Pounce have been App.net?
The most interesting stories of recent years has been the companies and teams that have said no to early acquisition offers like Twitter, Facebook, Square. It must be very hard to know when to sell a company and when to hold onto it with both hands.