Yahoo sale could be bad for minnows

Interesting question. Yahoo hasn't actually been buying many startups for the last couple years, because they've been feeling pinched. So not much would change if they went away. Will the perception that there are fewer acquirers make a difference? I wonder.

Actually it would not be at all unlikely if, having acquired Yahoo, MSFT started to buy more startups through them. It would be a smarter channel for all that money.

On the other hand, all the areas that Yahoo is currently good at could potentially be up for grabs again. There is a real risk of Flickr, Delicious and other 'hot properties' being neglected or ruined in the long run by Microsoft. Think of the great lead Hotmail had before being acquired by Microsoft and what it has achieved since. This can only be good for startups.

Look at the recent startups bought by Yahoo. When was the last time you heard anything from them again? The one exception is Flickr, but they were profitable and on a rocket ride to the top before they got acquired. As for all the others, the users are wondering when they'll ever see a new feature.

So for all we know, the situation might be better for startups after a Microsoft-Yahoo merger.

Google's acquisitions tend to have some unique technology. Yahoo's acquisitions have mostly been innovators with media and audiences. Does anyone know if there's a pattern with Microsoft? Microsoft has said they want to acquire a bunch of startups.

'Yahoo sale could be bad for flippers' - that's what the article means.

Obviously, many people would disagree, but why worry about early exit when your business is profitable and/or grows like hell? Where would you get same rate on return / risk on your cash after cashing out (you know the risk of your business)?

I can name Facebook and 37signals as two cases when the founders were in no rush to sell. Those seems to be good decisions so far.

What a stupid argument. Instead of having 3 chances in a million, now you'll have 2.

Maybe startups would be better off if they just forgot about acquistion as an exit strategy and concentrated more on building a sustainable business up front.

Giants can fail. That is a very important message for entrepreneurs, shown in a huge blinking neon sign# by this potential deal. The question isn't just "who will buy me" or "what if I'm copied by a giant", but also, "can I beat the giant?"

You can.

# remember that huge neon Yahoo sign on Houston in Manhattan? I do :)