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Comment by jka | Hacker News Reader

I wonder whether there has ever been an attempt to calculate the loss-in-value caused by acquisition-as-shutdown-mechanism.

They probably frequently lead to competitive benefits (and increased market share / revenue) for the acquirer, but the discontinuation of products presumably leads to lost time, effort, and potentially money as the former customers of the product look for alternatives (in a diminished market).

I'll beat my usual drum and mention that free and open source software can mitigate some of the risks (but not, for example, support availability) for a software-based product, similar to having an agreed source-code escrow provision with a vendor.

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> open source software can mitigate some of the risks

Have you seen this work in practice, do you have any examples to share?

It’s hard to take seriously at face value for two reasons: 1- generally speaking it might undermine the acquisition in the first place since acquirers and investors and boards tend to like private potentially patentable IP, or at the very least proprietary code. 2- More importantly using your software after an acquisition-as-shutdown to compete with the acquirer is almost certainly a recipe for legal trouble. This seems unlikely to get that far since the acquiring co probably would have vetted the software and also had the acquiree sign a non-compete. Either way, if the intent was to shutdown the software, and if the acquiree was paid for their business, there isn’t a good way to “mitigate the risks”, the deed is already done. If you want to avoid the risk of shutdown, don’t take the deal. When you do see open source software as having any ability to change that equation?

Sure - ZFS[1] is one example that springs to mind.

Those acquirer-side incentives do seem rational (and to some extent traditional) in a business sense.

The risk-mitigation I mentioned was from the perspective of users, not so much of the acquisition target (although it could reassure their employees to know that the time and effort they invested continues to provide value).

[1] - https://en.wikipedia.org/wiki/ZFS

> > open source software can mitigate some of the risks

> Have you seen this work in practice, do you have any examples to share?

Blender? https://en.wikipedia.org/wiki/Blender_(software)

Is that an example of an acquisition-as-shutdown? Or even an acquisition at all? Blender is a good example of an open source model working, and I don’t know the history, but the article implies that neither NeoGeo nor NaN closed due to acquisition, so Blender might not be an example of what we were talking about above, no?

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