Acqui-hires

I was perusing TechCrunch for the latest news, and came across the term “Aqui-hire.”  Not aqua, as in blue or water, but  acqui- as in acquisition..

Blast from the past.  Can I use this word in Scrabble?  My husband and step-daughter would literally throw the Scrabble game board at me for this one, as it’s not in the dictionary.

I love the word, as we immediately know what the speaker/author is attempting to convey:  That ABC Co. acquired 123 Co. for its employees.  Consideration of 123’s products, and the fit with ABC Co. are secondary.  A give-away clue is an immense organization making a tiny acquisition, relative to its size.  A small acquisition can be defined as one where the price isn’t required to be disclosed, which is under 10 percent of a company’s total assets.  Though, it can still be a big number.

Does this remind you of 1999 or 2007?  Well, it’s back in 2013.   Hmmm.  A six or seven year cycle.  Remember 1999, when people were attributing value to companies at $100,000 per engineer or employee?

This is the thinking of frothy markets.  ✔check!  Currently, the financial market indices are hitting new highs.

Right now, the internet/mobile/media crowd is doing it:  Yahoo!, Adobe and Google.   Below are recent acquisitions of that triumvirate:

Adobe

  • Ideacodes
  • Thumb Labs
  • Behance
  • Efficient Frontier
  • Typekit

Google

  • Makani Power
  • Wavii
  • Behavio
  • Talaria
  • DNNresearch Inc.

Yahoo!

  • Hulu (rumored)
  • Playerscale
  • Tumblr
  • Loki Studios
  • MileWise

There’s a significant difference in market capitalization and number of employees between the three companies.  Larger companies can more easily make and absorb acquisitions:  Adobe has a market cap of $21.5 billion and approximately 11,000 employees; Google’s market cap is $292 billion with about 54,000 employees, and Yahoo!’s market cap is $29 billion, with  11,300 employees.

Acquisitions provide a way of for a company to get the right skills at the right time.  It helps them quickly play catch-up or forge a radically different direction.  Yahoo!, with its new CEO, is playing out that strategy in spades.  Adobe is less active, and perhaps less desperate and more conservative.  Google, well they are so big right now, they can do anything.

Will these acquisitions work for these companies?  What do you think, and why?

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