Ask HN: Why do acquiring companies close acquisitions instead of spinning off?

7 points·lionhearted··4 comments

It seems like a lot of failed acquisitions/products are just closed down, but many of them have solid features and code, a decent brand name, and were once promising. Why doesn't a company like Google try to spin off or sell an acquirer company that didn't work for them?

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If the managers that originally pushed the deal through are still with the acquiring company, spin off or selling the acquired company could be politically damaging for them.

If all or nearly all of the developers of the product are staying with the acquirer (and that's usually true, hence the term aqui-hire) the level of difficulty of (a) recruiting an entire dev team, (b) recovering the months of lost time and (c) having that team learn the codebase well enough to restart development would almost certainly kill a product's market opportunity. Maybe existing users would be happy but the new sales would be very difficult.

Because the people who ran the product are more useful working on other projects than pursuing something the company clearly felt was a failure.

so a product with good brand and following has not much value without the original founders and teams ? Can't the product be run by a different team and company?

There are many situations where another company could see value in buying a product that the acquirer is no longer interested in maintaining.

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