Insight Community

Well, the issue is: Do you want to stay, or do you want to cash out? If you care about the products surviving in the new environment, you might as well give up now. If a firm becomes as large as the listed ones, they have to have professional product mangagement - and that means bending the product in ways which you never thought possible, and probably will dislike.

So, do you want to stay, or cash out? I have friends in Google, Yahoo, and MS, and from what they say: Everything you heard about Google is true. It must be a great place to work, until it crashes (I always remember Tandems global beer bashes when I hear stories like the ones about Google. And where is Tandem now?). Yahoo is having trouble defining itself, but they care about their users more than Google does (which is why a Microsoft acquisition is unlikely). Also a nice place to work, even if you get less free beer. Microsoft is like any large company, and the established product managers rule the roost. You would be eaten alive. The issue is whether you got paid well enough to like it.

 My few cents.

//Johan

Users typically don't care if a company has been acquired.  They do care however, when the playing field starts changing and the acquiring company changes the terms of service as previously agreed.

 In the case of MyBlogLog, the move to Yahoo's high performance servers greatly benefited the speed and availability of the MyLogBlog widget, and this really was a benefit to users.

 Users are typically lazy &/or busy.  If you change something that affects them and it causes them extra work, they will get irate.  In general, I would say if the actually "product" itself was changed or enhanced and the process was seamless, with no legacy adjustments, then all would be fine.

 From the position of those being acquired, fitting in with a new culture is challenging.  I would definitely delay any product deployment timelines and focus more on just supporting the existing product with no major changes for at least 3 months post move.  After the dust has settled, then focus on how to strategically fit the product into the acquirer's strategy.

The acquisition possibilities for widget-like plays seems polarized based on their size of adoption.  They seem to either get acquired very early on or once they have a massive following that impacts the usage of the 'host' ecosystem.  Some examples:

MyBlogLog were aquired by Yahoo! very early on.  They were a 'feature' rather than a service, but a feature none-the-less that Yahoo! needed.  It was ultimately cheaper for Yahoo! to buy them out ($7m-$9m), gaining a proven proposition, rather than 'risk' building in-house.  The early stage aquisition meant the valueation was low and cost effective.

The opposite I guess is Photobucket.  Their gallery widget is a significant traffic driver and is used most prominently on MySpace.  Recognizing that Photobucket had become so large that it was becoming a significant part of their service's usage Fox Interactive purchased the company for $300-350.  Ultimately it was purchased because it was becoming an integral part of the proposition from the user's perspective and clearly the host provider (FIM) wanted to ensure it could fully control, owned and monetize it.

You mention that you are a 'moderate sized firm' and I wonder whether that will be a downfall to being acquired at this time.  You maybe to large (and too great a valuation) to warrant purchase in a buy/build scenario by a large player.  But too small that you don't have the size of following that makes it strategically important to acquire you for your userbase.  

Nevertheless, to answer your question about "dealing with culture clashes and maintaining the usefulness of its products post-acquisition": I think it depends on many factors and the environment in which you are bought out.  If you are considered a 'feature' rather than a 'product' then I would have thought you might be forced to roll over and do what your new overlords want.  Chances are they will be buying you to fit into an existing larger strategy and you're simply a more cost effective way to acheiving that strategy then building in house.

However if you are a self-standing product with an established userbase then you have far more opportunity to maintain your own culture and doing things - after all that's what's attracted your userbase and that's what's given you the value you have bought to the company.  A great example of this is Flickr, and Yahoo! have done well to stand back and let the property continue to run autonomously - often in ways that are very different from the rest of Yahoo Corp.  

I think it therefore comes down to why the company has bought you and what their intentions are.  Maybe it's worth fully exploring this before you sell to a possible suiters?

In order to find insight from people who have faced acquisition it's often helpful to read the owner's personal blogs. I know the owner's of Dodgeball (a mobile app),  acquired by Google, posted about how much they hated working for Google after they had quit working for Google to join other startups.

From a user's perspective loyalty is not often lost unless the acquisition causes drastic changes of the application. A great example of this is Yahoo's acquisition of the Flickr photo sharing website. About a year after the acquisition Yahoo! decided to migrate all accounts to Yahoo! accounts thus forcing Flickr users to create Yahoo! accounts and migrate their Flickr memberships to those. This did not affect new users but it was a very big deal for their existing base.

Another thing to think of is that many companies (mostly Google) absorbs the brand as well as the product.  A good example is how Writely was absorbed and rebranded as Google Docs. Google will most likely do the same with recently acquired JotSpot and FeedBurner.  Yahoo! on the other hand does a fairly good job in maintaining the product's brand as well as treating the founders as a separate entity.

If I was a blog tool I would treat my suitors with caution. Typepad, for instance, has a very loyal fanbase as a hosted solution. But since the switching costs are so low for users in this niche if anything upset the user they could easily switch and migrate all their content to an open source solution like Wordpress. To use the Typepad example further - if Yahoo! bought Typepad (which would be an interesting depending on if SixApart created separate corporations for each product) and decided to increase the price there is no reason why upset customers could not switch to Wordpress with little effort.