What do acquisitions mean for everyday users?
This week can easily be labeled the corporate acquisition week. Microsoft has acquired the ad network company aQuantive for $6 billion; WPP Group spent $649 million to buy digital marketer 24/7 Real Media, and now a rumor goes on about Google acquiring the most popular RSS feed manager: FeedBurner.
Well, the fact that billions of dollars are passing hands among big companies is all nice and dandy, but what does it mean to the consumers, the everyday users? Is there some action they should undertake upon hearing such news? Let’s look at a couple of possible scenarios of what the big company can do with a smaller one after acquiring it.
Ruining it completely
Example: AOL and SingingFish
This is, unfortunately, a scenario that happens quite often. A bigger company buys a smaller company, puts it on ice, opens it up and picks up a couple of things it needs, and then lets it die out. In the example of SingingFish, it’s unknown how much of it AOL actually integrated into its own services, but it’s definitely clear that they didn’t care about the users, giving them absolutely no explanation or even notice as to why this multimedia search engine doesn’t exist anymore. The result is lack of users’ trust towards the mother company, which might not seem like much in the beginning, but it will inevitably rear its ugly head somewhere in the future.
Screwing it up
Example: Yahoo! and Konfabulator
Konfabulator was a cool little company that created desktop widgets for the PC, similar to those on the Mac, and now Vista. Immediately after buying it, Yahoo! released a new version which - at least from my experience - did nothing else besides changing the name (adding Yahoo! all over the place) and screwing up compatibility with a huge number of older modules. I’ve waited for another release, and when that didn’t help, either, I gave up on it completely - and I loved Konfabulator to begin with. It’s possible that this situation has gotten better with later versions, but what Yahoo! initially did was enough to kill the flare that surrounded this cool service, and made many users go elsewhere. Result of such behavior is a lot of users complains, and a big chance of losing many of them when you acquire another such service.
Letting it linger
Example: Yahoo! and Blo.gs
Once, Blo.gs was on the way to become Technorati. But after Yahoo! bought it in 2005, it stopped in its tracks, destined to fall into oblivion. Did Yahoo! screw it up? (well, perhaps yes, if you believe this blog post from the same year) Well, they simply did nothing with it. They’ve bought it and they let it linger. The service is still live, but is anyone still actually using it? I doubt it. It’s a matter of time before the Blo.gs domain simply starts redirecting to some of Yahoo!’s own services.
Integrating it into its own services
Example: Google and Urchin
This can be both good and bad. We could say that AOL “integrated” SingingFish into its own audio/video search engine, but just read the comments on our post about the event, and you’ll see what the users think about it. A good example would probably be Urchin, the analytics company that Google took under its wing and gave it out to the people completely free of charge, under the name “Google Analytics”. I doubt anyone is feeling nostalgic about the old Urchin, simply because Google Analytics (which recently had a considerable facelift) looks and functions great.
Making it thrive
Example: Google and YouTube, Yahoo and Flickr
These relatively recent examples show that big companies (some of them, at least) have wisened up. If they spent billions on something, they wont carelessly and immediately paint the service into their own colors. They understand that users like the original service, and don’t want to be fed corporate crap. They also understand that the trademark they just bought is theirs now, and they can use it to their advantage. Thus, the users of Flickr and YouTube barely noticed that their favorite service had been bought at all. This is how it should be done; and this is what you should do if you want your users to trust you.
So, what can you - the everyday user - do about this? Not much. Companies will get bought and sold no matter what you do. But you can check out lists such as this one - our big list of Yahoo!’s and Googles corporate acquisitions - do your research, and decide who do you trust. If a company has a history of screwing up companies they acquire, don’t forgive them, and don’t let them get away with it. Go with the competition.
May 19th, 2007 at 5:59 am
Another great article. It’s a really nice overview of what can happen. I’ll also point out that the greatest successes are for services well on their way to becoming huge themselves. However, my thoughts on Flickr are mixed. I give Yahoo credit for not screwing it up badly but their migration to Yahoo IDs (though understandable with their phasing out of Yahoo! Photos) kind of ruins it for me. Also the product’s turnaround for improvements has gone down sharply since acquisition which pretty much goes for any of the “successes”. I don’t think anything can “succeed” past large corporation bureaucracy.
May 19th, 2007 at 6:44 am
@baron: I share your suspicion towards large corporation. I’d even go so far to say that large corporations are inherently a bad thing.
May 19th, 2007 at 9:14 am
[…] [STARTUPS] What do acquisitions mean for everyday users? (franticindustries.com) […]
May 19th, 2007 at 11:11 am
If you don’t trust large corporations, get rid of Sarbanes Oxley. The cost of complying with this ridiculous and hastily passed bit of legislation has driven many small to mid sized corporations to either be acquired or to go private. And IPO’s are more or less a thing of the past. So, aquisition is the new IPO. The end result is more power in fewer hands. Nice to see your government at work!
May 19th, 2007 at 1:04 pm
Can you imagine what might happen to MyBlogLog with all the latest news behind it’s tracking of Adsense clicks, to the gaming of profile icons, to spam on your profile page, to….
So far though it seems it’s growing, let’s see how Yahoo takes MBL going forward.
May 19th, 2007 at 2:07 pm
@Ali: MyBlogLog hasn’t done anything for me since I’ve joined, and although some changes are supposedly on their way, they’re still not here yet.
May 20th, 2007 at 9:24 pm
i don’t think that acquisition is bad. let’s take flickr as an example. it is the primary image sharing source after yahoo’s acquisition. it is always good to see big search engine like yahoo, google and microsoft acquiring innovative concepts.
May 21st, 2007 at 3:27 am
[…] So what does this mean for the average user? There’s a reasonable piece here, but my take on this is that it’s a very good thing for the consumer - so long as the competition remains hot. […]
July 19th, 2007 at 9:01 pm
[…] [STARTUPS] What do acquisitions mean for everyday users? (franticindustries.com) […]
July 22nd, 2007 at 12:15 am
[…] So what does this mean for the average user? There’s a reasonable piece here, but my take on this is that it’s a very good thing for the consumer - so long as the competition remains hot. […]
July 16th, 2009 at 10:37 am
Your post franticindustries - web 2.0, social networking, IT technology trends. » Blog Archive » What do acquisitions mean for everyday users? was very interesting when I found it over google on Thursday by my search for singingfish.com. I have your blog now in my bookmarks and I visit your blog again, soon. Take care.
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January 3rd, 2010 at 12:20 am
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January 29th, 2010 at 11:24 pm
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