

Why Most Startup Acquisitions Fail, And Always Will - jmartin
http://gigaom.com/2011/02/23/why-most-startup-acquisitions-fail-and-always-will/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+OmMalik+%28GigaOM%3A+Tech%29

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stcredzero
_A Flickr developer’s tale of how Yahoo continually tied up development at the
photo-sharing service is a perfect example: 85 percent of the unit’s time was
spent dealing with the Yahoo bureaucracy_

When large companies have an economic advantage, it's because certain
transaction costs are lowered within the organization. These lower transaction
costs can be used to competitive advantage when producing products for
external markets.

There seems to be a strong tendency for this to break down when establishing
new patterns of transactions. Why? Why don't companies give the same
transaction cost advantages to entrepreneurs operating inside?

