
Wish rumored to have rejected acquisition offers from Amazon and Alibaba - coloneltcb
http://www.businessinsider.com/wish-rumored-to-reject-acquisition-offers-from-amazon-and-alibaba-2015-11
======
cantrevealname
It seems to me that Amazon or any large e-commerce company could duplicate
every aspect of Wish's business for a tiny fraction of the $10 billion they
offered.

I have no personal knowledge, but I'm going to offer 3 theories on what's
really going on:

(a) Perhaps Wish is undergoing exponential growth and there's no way Amazon
can catch up if they did it themselves. This is why Microsoft paid a fortune
to acquire Hotmail rather than just creating their own free email service.
(The $400 million that Microsoft paid seemed absurdly crazy at the time.
That's _million_ , not billion. How quaint the web was.)

(b) Not all decisions are driven by hard reasoning about money and numbers.
Executives enjoy schmoozing, hobnobbing, and doing "big deals". Would you
rather be the worker-bee executive who spends the next 2 years and $30 million
creating a division that duplicates Wish's business model or be the bigwig who
orchestrated a ten _billion_ dollar deal in 3 months? It's not your money
after all.

(c) Accounting rules vastly favor investing in other companies rather than
spending it internally. This is nicely explained in an old article by John
Walker, founder of Autodesk:

 _" Many people think that because Autodesk has $140 million squirreled away,
we can use that money free of constraints. But that isn't how it works.
Regardless of how prudent you've been piling up money over the years, the
moment you spend any of it in your business, it's just as if you increased
your day to day operating budget. That means rising expenses without an
increase in sales, and that translates into . . . falling margins.

About the only thing you can do with the money that doesn't cause margins to
fall, other than giving it back in dividends, is investing it in other
companies. When you make an investment, that's carried on the books as
capital. As long as you don't have to write the investment off, it doesn't
affect your operating results."_

Or maybe some combination of (a), (b), and (c) above.

~~~
pkaye
Regarding (b), what happened to the executive obligation to maximize
shareholder profits? It's not their money after all...

~~~
bryanrasmussen
regarding a sense of obligation among the wealthy - whatever happened to that?

------
saisi
Interesting, never heard of Wish before. Notwithstanding, pretty much a of fan
of startups are built as a 'traditional' business (built with a view to
longevity, little hype, not looking for a quick cash out or acquisition). It's
a pretty bold move turning down Amazon. Amazon has the technical, market, and
financial capital to squeeze them out [1]. The pinterest-like page dotted with
curated items is a key differentiator, but seems to offer little advantage at
best and an actual impediment to online shopping. It seems their main
advantage will be relying on great curation channels and a close knit
community with huge repeat purchasing.

[1]
[http://www.slate.com/blogs/future_tense/2013/10/10/amazon_bo...](http://www.slate.com/blogs/future_tense/2013/10/10/amazon_book_how_jeff_bezos_went_thermonuclear_on_diapers_com.html)

------
downandout
I've never heard of this company. It appears to be Alibaba with a slick
interface and a focus on discounts. Their merchant platform basically lets
merchants import their eBay or Alibaba et al stores. They don't actually stock
anything - they depend on merchants to upload lists of things they want to
sell and shipping takes a long time.

So I get the business model, and that it would be very simple . But the real
question is...how did they get 100 million users with no press and seemingly
no advertising? I would say that I smell BS, but the app has nearly 2 million
_reviews_ on Android alone, and a very small percentage of people post
reviews. So either these are fake, or the company pulled of the greatest
growth hacks in history.

------
TeMPOraL
Could somebody explain in short what exactly is Wish and what's so special
about them?

My only encounter with them was when they were offering free $10 (or $20?)
coupons as a sign-up bonus. Me and my friends signed up and stocked our
hackerspace full with lots of cheap Chinese Arduino clones and, never returned
to the site again. Based on their webiste, we actually thought it was a joke
or some sort of scam, but risked it and then the packages started coming, so
apparently it is legit. I only wonder how they are still alive after giving
away so much free money.

