This week, it would seem that all the Blog Pundits went into acquisition-deficit-disorder frenzy, firing off suggestions that X should buy Y soonest, no doubt following AOL buying Techcrunch. One of thwe main proponents was Henry "DotCom" Blodgett's SAI, (I suspect they were playing corporate spin-the-bottle one night after hours) who finally hit M&Agasm with Google buying Twitter, leading to John Battlelle calling (sensibly) for them to
Stop It!
Those who decide whether Twitter goes to Google pretty much come down to a handful of folks: Founders Evan Williams, Jack Dorsey, and Biz Stone, with COO Dick Costolo and Twitter's investors and other Board members (Fred Wilson, Peter Fenton, and Bijan Sabet). I know most of these guys well enough to say this with confidence: They don't want to sell, and even more importantly, they don't need to.
Now, sure, Google can write a ridiculous check, and perhaps, that might sway the key folks (management). But I doubt it. Why? Because nearly all of them have already sold a company to Google - Blogger (Evan and Biz) or Feeedburner (Dick). And, well, they didn't stick around, did they?
They've got a tiger by the tail, the chance to build an independent, lasting legacy that will cement each one of them forever into the immortal tablets of business history. It's really, really hard to pass that chance up, especially if you've already gotten a score or two under your belt. Why not swing for the fences if you're already batting over 300?
In short, they're not in it for the money. They're in it for the immortality. And that's a much, much bigger deal.
Battelle also feels Google is becoming more sophisticated as a buyer (not hard). But this point above about Da Management wanting to hold on for a higher, better offer reminded me of the
fading of Digg (do you remember them - they used to be big, oh, 3 years ago?) who surely must be the posterboy Pointcast of web 2.0 (Pointcast famously refused to sell in dotcom days for several hundred million thinking it was going to change thev world and collapsed a year afterwards in dotcom bust, Digg's investors apparently refused $80m a few years back). Now its desperately trying to scrabble back -
Venturebeat:
In the last few weeks Digg has brought back a slew of old features whose absence had rankled site users. The Upcoming section returned along with the pagination feature. Pagination had been removed in favor of a feature similar to one on Twitter that allows users to expand the number of items on one page instead of clicking to another page. Digg also brought back user submission logs and unveiled new publisher buttons. Many publishers did not use the new buttons immediately, however, because of ongoing problems with the site’s Application Programming Interface
We'd put money on it not succeeding, the rate of iteration is so fast in this space and those who come later inevitably come in with a better product, and its darned hard to re-jig the legacy system to match - a point made by Wesabe's founder about
why they failed vs Mint:
There's a lot to be said for not rushing to market, and learning from the mistakes the first entrants make. Shipping a "minimum viable product" immediately and learning from the market directly makes good sense to me, but engaging with and supporting users is anything but free. Observation can be cheaper. Mint (and some others) did well by seeing where we screwed up, and waiting to launch until they had a better approach.
Personally, although this is valid, I also felt his problem was not just technology but marketing, as one of
TechCrunch's commentators remarked:
But he never addressed the marketing side of Wesabe. From what I know, Patzer of Mint spent every free dollar on PR. It was his cheapest form of advertising to the masses. Whether it was PR or Google Adwords or SEO or promotions or whatever...Wesabe stayed too internally focused to get the market share needed.
When Mint won TechCrunch40 startup competition, despite already being funded and having some of its backers on the panel, you pretty much knew everything you needed to about their modus operandii....Mint was heading for the exit from the get go.
But Mint/Wesabe points us back to the techCrunch/AOL thing, in that in any space there is probaby one, maybe two big exits (when Intuit bought Mint, who was going to buy Wesabe?). Same with TechCrunch - apart from AOL, who else will pay big bucks for another Tech Blog?
In M&A, as in so much else, timing is everything......
