
For Xobni, Why It Is Good Time To Sell - tandaraho
http://gigaom.com/2008/04/20/for-xobni-why-it-is-good-time-to-sell/
======
michael_dorfman
When is it ever _not_ a good time to sell to Microsoft, if they are
interested?

~~~
epi0Bauqu
If the terms they offer are not worth it to you.

~~~
michael_dorfman
But how likely are the terms to get better down the road? And, if Microsoft is
interested enough in your idea, are the barriers to entry really sufficient to
keep them out of the solution-space?

~~~
epi0Bauqu
The latter is clearly case by case. The likelihood of terms getting better
depends on the company's trajectory. That is, in this case, if Xobni grows by
two orders of magnitude in important metrics, their valuation is likely to
grow as well.

~~~
michael_dorfman
Sorry, I remain unconvinced. If Microsoft thinks that the problem-space that
Xobni solves is interesting enough to attempt a purchase, I suspect that if
rejected, they would put their attentions to building or buying a substitute.
Even if Xobni's userbase grew by two orders of magnitude after the fact, I
suspect that once the Microsoft ship has sailed, it won't be stopping in that
particular port again. In this case, since Xobni's product is parasitic upon a
product of Microsoft's, I doubt that somebody else is going to come along with
a more attractive offer in any event.

So: I think for Xobni the time has come to sell, and try to get the best deal
they can. And, in the general case, if one is building a product that is
parasitic upon a major platform, and the platform vendor makes an offer-- ring
the bell, it's dinner time.

~~~
epi0Bauqu
No problem. Your response is very limited to this case, while I thought you
asked a more general question about why you might pass on a Microsoft offer.

Consider the edge cases, which is always a great idea.

If Microsoft offered them $1 today, clearly it is not appropriate to sell,
despite Microsoft taking them time to _be interested._

If they turn down the offer, and 6 months later grow to 10M users from 100K,
clearly the terms should change.

Now your point seems to be that they won't change because Microsoft won't
offer any terms again, ever. However, in my experience, this is not how M&A
negotiations usually go. The door hardly ever closes for good. And it is quite
common for people to walk away only to resume shortly thereafter (months) with
different terms.

Now whether Microsoft decides to pursue it or not is a different story, and I
don't know enough about the internal workings of Microsoft to know the
likelihood of that.

As for other offers from other buyers, I don't see why not. I don't use Xobni
now, but if it is a general solution that is generally applicable to email,
that solution is presumably valuable to more than just Microsoft.

