POSITIVE INFLUENCES
Business 2.0 has a detailed article on Yahoo!'s acquisition of Flickr, and the resulting "Flickrization" of the company.
The article does a good job of highlighting the decision-making process that Yahoo! went through before acquiring the company and the many internal reactions it's had pre and post the acquisition.
Here's a relevant excerpt:
"Butterfield and Fake had several offers on the table for Flickr, reportedly including one from Google. Yahoo was their top pick. By March, Horowitz had persuaded his top brass to buy Flickr for an undisclosed sum, estimated to be around $30 million.
But first, COO Dan Rosensweig had to overcome a lot of internal grumbling. There was no real business behind Flickr, and no unique technology either. So why did Yahoo need it? Says Rosensweig, “We could only justify it when we realized how big the vision could be if applied to the Yahoo network.”
Once Yahoo committed to Flickr, those inside the company who believed in the promise of social media were even more encouraged to speak up, and Yahoo’s executives were more likely to pay attention.
Since the Flickr acquisition, Yahoo has added Upcoming.org, an online events database created entirely by its users, and Konfabulator, which lets people design their own desktop software widgets and was bought with an eye toward eventually allowing users to slice and dice Yahoo content any way they want. The company has also launched beta sites for blog search and podcast search.
Such was the hunger for social media projects that Butterfield and Fake were in high demand from the moment they arrived in Sunnyvale. The pair were pulled into meetings with other groups -- Yahoo Travel, Shopping, Local, 360 -- that wanted help becoming more Flickrized.
Fake spoke to the folks at Yahoo Autos about the best ways to build a community around custom rides for auto enthusiasts. The travel group, which has more than 250,000 in-depth travel guides written by readers, wanted to tap the knowledge of its audience even further. “I spend so much of my time on stuff that is not Flickr that it stresses me out,” Butterfield says."
This description of the Yahoo! experience is a great example of how ORGANIC and DYNAMIC the process of acquiring companies small and large is within corporations. It's contrary to mainstream assumptions that every acquisition is driven by a "GRAND, MASTER PLAN".
This is especially true of the big internet companies (GYM or GYMAAAE) where everyone fusses over every acquisition move, real or presumed, large or small. A recent example of course is the on-going debates around the "master plan" behind eBay buying Skype.
The best thing senior management can do in these situations is make sure the acquired company and it's people have as easy a time being internal "change agents" as possible, and get out of the way. And of course, think and execute through the business model issues that these changes may represent.
The Business 2.0 article does a good job reviewing the business model issues with Yahoo! around Web 2.0 oriented changes.
Of course, in many cases, there's also an external PR message to be conveyed. After all, Yahoo!, a company with a $55 billion market cap, is now in the process of being transformed into a "social media", web 2.0 company with a $30 millionish acquisition, helped of course by the media.
On a side note, Yahoo! et al are possibly looking at another "out of the box" startup in the photo space, Riya.com. The service is barely in beta stage, so it's very early. But the underlying promise of using photo and pattern recognition to organize and FUSE (a favorite Yahoo! term) photos is interesting. Riya was another company I mentioned as a possible "thriller" in an earlier post, along with Foldershare (see point number five).
Hopefully the recent acquisition of Foldershare by Microsoft (see earlier post) has similar internal and external reactions as Flickr on Yahoo!. I can't wait to see the articles on the "Folderization of Microsoft".
And of course, the "Skypezation of eBay".
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