

The Google black hole: What happens to startups when they're bought by Google? - gabrielroth
http://www.slate.com/id/2197434/pagenum/all

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fleaflicker
It's interesting--Google has the best reputation among techies and AOL
probably has the worst reputation.

But so far my experience has been very positive. I still have near-absolute
control over the development and creative direction of the site.

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biohacker42
Maybe Google think they know everything and AOL just feels lucky to have found
such a beautiful jewel?

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fleaflicker
That's somewhat true--I've noticed that AOL is very aware of their uncool
image and they don't overtly brand their properties with the AOL name (e.g.,
TMZ, MapQuest, Moviefone, ...).

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kajecounterhack
Wow I had no idea Mapquest was owned by AOL. I'm sure there are alternatives
but usually thats the service I use...I don't think I'm so shallow as to
switch services just because its AOL though. A good service is a good service.

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micah63
I think the google + youtube worked out because they let the community
continue unhampered. Even today you can get a youtube account without a google
account. That is smart.... We can't pretend to know google's intentions with
some aquisitions though, ie measure map getting blended into google analytics.

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jonknee
Ironically I bet a lot of that is because of all the illegal content on
YouTube. They needed it to remain pretty separate for their lawsuit defenses.

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goodkarma
When Google hands over six or seven or eight figures for something, they
obviously have a plan for how the technology and team fits into their "master
plan".

Why is it surprising that, at least some of the time, they aren't actually
interested in the original web site?

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neilk
_they obviously have a plan_

That's not actually true. The thing about giants that acquire startups, is
that a) they had the resources to build this thing themselves; b) they didn't.

So ask yourself why didn't they build this thing. It wasn't lack of resources.
It wasn't lack of intelligence; they keep tabs on everyone and they go to SXSW
too. There were forces that stopped the giant from innovating in this
direction. Some of them are technological, but the real issues are usually
cultural and political.

Once acquired, the startup is now exposed to all these forces -- with double
intensity, since it is an outsider and has few friends in the organization.
Unless it's already profitable, has a large userbase, or has big fans among
the top execs, it has very little power.

I think these recent articles about how giants "ruin" acquisitions do not take
culture and politics into account. The technical issues are not the problem.

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goodkarma
The depth/extent of the plan is surely debatable, but folks like Larry and
Sergey and Eric Schmidt would not make the decision to pull the trigger for an
acquisition unless they knew what they wanted out of it. They are smarter than
that .

In the case of MeasureMap, for instance, they knew they wanted that technology
integrated into Google Analytics. They may not have been able to answer the
"how" part of "who, what, when, where, why, and how", but surely they knew the
"who", "what", and "why".

I understand that the startup built the technology and the acquirer didn't.
That's the beauty of how this system is set up - a company like Google with
piles of cash and stock can has so much money it can buy anything it wants.

Well then how do they decide which startups to buy (MeasureMap, Feedburner,
etc.) and which startups to pass on (Digg)? That's the "master plan"..

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aditya
Interestingly, they don't mention Blogger (which is how the Twitter co-founder
went into and came out of Google). Which seems to be doing just fine.

[http://siteanalytics.compete.com/blogger.com+livejournal.com...](http://siteanalytics.compete.com/blogger.com+livejournal.com/?metric=uv)

I don't see the problem, if you start a startup to make a shitload of money
and you do make a shitload of money, then, mission accomplished right? (or, as
DHH would say: Profit!)

There will always be companies that get screwed up in the acquisition process,
just like there will always be companies that don't. But, let's fuel the rumor
that Google kills all that it consumes, why not?

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josefresco
I think the article states that it isn't always a shitload of money. Sure it
beats your part-time gig at Starbucks but why sell your app for 5-6 figures
when it could be worth 7-8?

If Google is interested in your application now, why wouldn't someone else
snatch it up 6 months later when you have more users for a higher price?

Sometimes winning the buyout lottery is selling yourself short.

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litewulf
And sometimes your hot company flames out and you'll regret not taking the
money and running for the rest of your life.

This is what managing risk is all about isn't it? You just plain don't know!

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ashleyw
The problem with Google is it has very, very little focus as a whole. This is
a good thing internally, they seem to develop and release so much stuff
without much bother, but in my opinion, joining Google would FEEL like a black
hole. Your working on your own project but also have to concern Google about
everything, as well as moving your app to Google technologies (in most cases).
How can you continue to innovate in that situation?

The same goes for Delicious too I think, they were doing fine, brought by
Yahoo, and then went back to being a stealth app while they rewrote everything
in C++/PHP. Would they have done that without Yahoo input? Nope, I dont think
so...

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josefresco
Excellent article, I didn't know that so many startups went to Google just to
rot away under mountains of management and infrastructure/policy hell.

If you have any chance of making it on your own, I'd turn down Google money in
an instant after reading this.

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drewcrawford
The thing about Google money is that a dollar Google gives you is worth one
dollar.

Personally, I would evaluate "Google" money based on the numbers.

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ajross
Indeed. From the perspective of a developer, I can see not wanting your baby
to be ignored in a corporate bureaucracy. But investors don't normally think
that way. I don't know what founders are "supposed" to think here, but if it
were me I'd take the money and find a new baby if I had to.

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andreyf
_I don't know what founders are "supposed" to think here_

Founders are supposed to take into consideration their product's role after
acquisition when they're talking about getting bought out?

This isn't rocket science - once you sell your company to Google (or
whomever), you don't own it anymore. That's why you get all those shiny coins.

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jlogic77
I wonder what types of questions the founders are asking of Google pre-
aquisition? As a founder, I would think you are concerned with what is
Google's "vision" for your product/company. I could also see just the shiny
things being enough to make me not worry about the vision.

Also, there are successes. Writely - > Google Docs seemed to be a pretty big
success. I'm sure there are others.

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Timothee
Keyhole -> Google Earth was a big success too.

The thing is that we tend to forget the successes a little bit because they
got to merge so well with Google. Looking at the list of acquisitions on
Wikipedia (<http://en.wikipedia.org/wiki/List_of_Google_acquisitions>), I can
only think about Blogger but I have no experience on if it changed for the
best. As far as I can tell, it looks like it's still working fine.

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arockwell
It seems like this type of article shows up at least once a month recently.
There's nothing really new here.

I have to ask though, given that most M&A's don't end up working out is
google's failure rate really any worse than anyone else's?

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gregwebs
There is some prior art on this concept. <http://www.paulgraham.com/mit.html>

Speaking of cool places to work, there is of course Google. But I notice
something slightly frightening about Google: zero startups come out of there.
In that respect it's a black hole. People seem to like working at Google too
much to leave. So if you hope to start a startup one day, the evidence so far
suggests you shouldn't work there.

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Raphael
Friendfeed came from former Google employees.

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josefresco
Key word being 'former'. Seems the brilliant work comes either from people who
aren't yet an employee, or already were and left.

Is Google just a giant Y Combinator?

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neilk
No, what you are seeing is that individually creditable work occurs in the
pre- and post-corporate employment stage. Which is practically a tautology.

There are plenty of epic technical achievements within Google. In fact, it's
practically expected. The rest of the world just hears about these
innovations, on average, three years after they happen. If they ever hear
about them.

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snprbob86
"shut down to new users" just means "taking their sweet time porting to a
google backend"

When things are Google products, there is a certain level of reliability,
security, and performance that is expect. Google tries harder than anyone to
avoid the Fail Whale.

It takes a long time for large software systems to be ported, security
reviewed, integrated, and tested with Google's custom stuff.

From what I have seen, being acquired by Google means that you go dark for 18
months and then emerge as a Google product.

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vaksel
Yeah you would think Google would learn its lesson by now.

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gaius
Arguably that's what AppEngine is for.

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vaksel
not really, its just another case of Google getting into an industry because
they see someone else have success in it. If it works? Good. If it doesn't? No
biggie, they only lost 2 days of revenue in the investment.

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cstejerean
I hope it's not "getting into an industry because they see someone else have
success in it" because that reminds me of Microsoft and I don't think it's
worked out well for them.

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jm4
Are you crazy? How has it not worked out for Microsoft? As of 2000 it was
estimated that Microsoft had produced 10,000 millionaires. Sure, they've
produced tons of crappy software too, but as long as we're measuring success
in terms of money then I'd say the strategy has worked perfectly. They've been
by far the most successful software company to date. They could care less
about the quality of software as long as it's the best selling software.
Google is no different. They see a revenue opportunity and they grab it.

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gamble
All of MS's profits come from Windows and Office. The odd quarter excepted,
everything else they do operates at a loss.

For any other company, habitual 9-10 figure losses would have heads rolling on
the floor.

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gaius
Visual Studio and SQL Server as well?

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ewanmcteagle
Visual Studio is not profitable for Microsoft (from what I've heard from MS
employees) but that is also not its purpose. It's there to guarantee the
success of the Windows desktop and server platforms. Microsoft knows
development and ease of development has been a large contributor to the
success of Windows.

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andreyf
I'm not sure if it's fair to pick out specific cases with the number of
acquisitions Google does ... sure, some aren't going to be perfect - some
founders won't understand Google infrastructure, others will lose interest in
their products, etc.

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trickjarrett
I remember reading about the infrastructure hell with both Google and Yahoo. I
think I've read stories from founders of companies acquired by each. It seems
to me Ev (of Blogger.com and now twitter) wrote or spoke about these same
issues.

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wmeredith
I still use Feedburner. I love it.

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kul
seems like this guy hasn't heard of talent acquisitions, which is what Jaiku
was.

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fmanjoo
If it was a "talent acquisition," why'd they pledge to limit the service only
for a limited time, and to add a slew of wonderful features?

