Episode 26: Marvel

Ben and David complete the Disney acquisition trilogy, covering the "house that Mickey built"'s 2009 acquisition of Marvel Entertainment. Will our own superheroes save the day for shareholders, or perish at the hands of villainous corporate raiders? Tune in to find out!

Topics covered include:

  • Marvel’s corporate origins as "Timely Publications”, created in 1939 by pulp magazine publisher Martin Goodman in NYC, with the publication of Marvel Comics #1
  • Creation of enduring characters such as Captain America, the Fantastic 4, Spider Man, The X-Men, Iron Man, Thor, The Hulk and more
  • Adoption in 1961 of the "Marvel Comics” brand, and writer-editor Stan Lee’s transition of the company towards focusing on edgier characters and stories targeted at older audiences 
  • Marvel’s first sale in 1968 to the Perfect Film and Chemical Corporation (later Cadence Industries)
  • The company’s “turbulent” corporate history through the 1980’s and associated mergers, acquisitions and lawsuits
  • Marvel’s reinvention as a film-focused media company in the late 1990’s and early 2000’s with the launch of Marvel Studios
  • Disney’s ultimate acquisition of the company for $4.2 billion in August 2009, during the depth of the great recession 
  • Marvel's—and in particular Marvel Studios’—performance since the acquisition 

Followups:

Hot Takes:

The Carve Out:

Episode 25: The Facebook IPO

Hey Acquired listeners. A note about this show: we recorded this episode the night before the 2016 Election Day in the US. At the time, the biggest change we saw coming was adding a new type of content to Acquired in analyzing IPO’s, which we introduce in this episode. Two days later, we woke up to a very different world than the one we were expecting.

Reflecting on what’s happened, and the past few months of our show, we wanted to say two things:

First, we want to apologize for our cavalier attitude toward this election cycle, and our glossing over the clearly very real problems and deep divide in America that it represented. In the Skype episode, David pretty glibly compared the AT&T - Time Warner merger to "Make America Great Again", arguing that any reactionary force is “on the wrong side of history” and cannot be relevant in a changing world. That was wrong, the sentiment behind it was wrong, and it was insensitive to the very real pain a lot of people are feeling out there on both sides. 

Second, looking back on this particular episode about the Facebook IPO, we think it actually might present a relevant parable for our country right now and--we hope--some important lessons for the technology industry going forward. For all the wonderful aspects of the tech industry that we celebrate on this show, there is no doubt that it also bears a great deal of responsibility for the current divide in America, and especially in its contribution to wealth inequality. Likewise, for all the wonderful aspects to the Facebook IPO story, as told in this episode, there is a very dark side as well: Facebook shareholders, investment banks and institutional investors raked in billions of dollars at the expense of individual retail investors who lost their shirts. 

At the same time, Facebook’s perseverance through their “broken IPO", and their determination in overcoming with incredible speed the massive, existential challenge to their business model posed by mobile, is something we think *can be* an inspiration to us all on how to move forward even when that seems hard. We hope you’ll listen to this episode with that in mind and think about how you, we, and the technology industry as a whole can do better in serving everyone in this country and in the world. 

Thanks for being on this journey with us. We’re sorry for our shortcomings, and we’re going to keep working hard to do better. 

-Ben & David

Topics covered include:

Followups:

Hot Takes:

The Carve Out:

Episode 24: Skype

Episode 24: Skype

An acquisition so wild and crazy, they had to do it again. And again. Ben & David cover tech’s perhaps most-traded asset, Skype (which also happens to be a fantastic business). How do we even know which deal to grade? Tune in to find out… 

Topics covered include:

Followups:

Hot Takes:

The Carve Out:

Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)

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Episode 23: NeXT (Live show at the GeekWire Summit)

Episode 23: NeXT (Live show at the GeekWire Summit)

Ben & David broadcast live from the 2016 GeekWire Summit covering one of the all-time greats, Apple’s 1996 acquisition of NeXT. This episode has it all: the Steve Jobs hero story, Apple, I.M. Pei, Ross Perot, Aaron Sorkin, Nobel Laureates and… Gil Amelio? Does NeXT rank atop the best acquisitions ever? Our own heroes cast their votes. 

Topics covered include:

The Carve Out:

Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)

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Episode 22: Zillow + Trulia with Zillow Group CFO Kathleen Philips

Episode 22: Zillow + Trulia with Zillow Group CFO Kathleen Philips

CFO of Zillow Group Kathleen Philips joins Ben and David to cover the show’s first true “merger” versus “acquisition" (only took 22 episodes!), Zillow’s 2015 combination with Trulia to form Zillow Group. 

Note: our audio glitches unfortunately continued on this episode, and quality is rough. We recommend listening on speakers vs headphones if you’re able. We apologize and will be back to normal quality next time!

Topics covered include:

  • Zillow and Trulia’s beginnings during the “Web 2.0” era in the mid-2000’s 
  • Zillow, Trulia and other online players’ place within the massive US real estate market
  • The lengthy “dance" between Zillow and Trulia and earlier aborted merger talks between the two
  • The difficulty of "true mergers” among private companies and why the path is easier for public companies 
  • Public company shareholders’ influence and role in M&A transactions 
  • Details of the blazingly fast negotiations (27 days start to finish!) per disclosures in the SEC filings (scroll down to "Background of the Mergers”)
  • Structuring the deal and incentivizing Trulia and Zillow mangers to stay and continue growing as separate brands
  • Trulia cofounder Sami Inkinen’s whereabouts during the merger negotiations 
  • The experience going through a lengthy FTC review of the merger, and defining what the relevant “market” is the FTC should be considering
  • Introducing our new acquisition category: a “time machine acquisition” ;) (h/t Kathleen)
  • Zillow Group’s overall approach to acquisitions, folding into its broader HR strategy 
  • Zillow founder Rich Barton’s startup thesis of searching for "What piece of marketplace information do people crave and don’t have?"

Followups:

Hot Takes:

The Carve Out:

Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)

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Episode 21: Inside the M&A Press with Bloomberg's Alex Sherman

Episode 21: Inside the M&A Press with Bloomberg's Alex Sherman

Ben and David go inside the M&A press with Bloomberg’s technology M&A reporter and host of the Deal of the Week PodcastAlex Sherman. If you’ve ever wondered how stories about big deals get broken or what “according to people familiar with the matter” really means, tune in for the behind-the-scenes scoop! 

Note: A technical glitch with our recording setup created occasional short silences between Alex’s comments and Ben & David’s. It shouldn’t impact listenability, but we apologize for the awkward pauses!

Topics covered include:

  • Bloomberg’s own fascinating “history & facts” and origins following the acquisition of storied Wall Street firm Salomon Brothers 
  • Bloomberg’s core as a highly profitable technology business (selling terminals to Wall Street firms), with a large media empire built on top of it
  • The tradable value of breaking M&A news & information to Bloomberg’s terminal customers, and competing on speed
  • How “sources" work — and industry standard that sources be directly within the companies involved in a deal
  • The coded language of M&A reporting and gleaning where information is coming from based on a story’s structure and phrasing
  • The lifecycle of a story—steps from sourcing to writing to release, and reasons (or lack thereof) for why stories run when they do
  • Internal & external PR resources companies use for M&A 
  • How Alex prioritizes his time researching and creating stories, and who he’s meeting with to hear about what deals are in the works 
  • The difference between ‘news' and ‘analysis', and why news dominates the majority of stories versus deeper analysis
  • Media and social media business models, their evolution in the messenger world, and speculation on Twitter’s future
  • How entrepreneurs can think about interacting with the press and building relationships with the right reporters for their stage and space
  • Apple’s ‘unique’ approach to press relations 

Followups:

Hot Takes:

The Carve Out:

Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)

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Episode 20: Android

Episode 20: Android

Ben & David examine Google’s 2005 purchase of Android for a rumored $50M, undeniably one of the best technology acquisitions of all time. But will it top the list of these tough graders? Tune in to find out.

Topics covered include:

  • Welcome new listeners! We quickly review the show format for newbies. 
  • Community spotlight: Patagonia on a Budget from community member Matt Morgante (@mattm on Slack)
  • Andy Rubin’s career trajectory and what made him “born to start Android"
  • The undeniable “cool factor” of the Danger Sidekick in the early/mid-2000’s, including fans such as Larry Page, Sergey Brin and… Turtle from Entourage 
  • Android’s original ambition to build an operating system for… digital cameras
  • WebTV founder Steve Perlman is pretty much the best friend ever 
  • Google’s own perspective on Android as their “best deal ever"
  • The Android team’s reaction to Steve Jobs unveiling the iPhone in January 2007, and redesigning the initial launch hardware
  • Announcing Android and—equally importantly—the Open Handset Alliance (“OHA”)
  • The much-talked-about "mobile holy wars", between Android’s “open” platform and Apple’s “closed” platform
  • The less-talked-about US carrier wars with the iPhone + AT&T in one camp, and everyone else in the Google / OHA camp (including “Droid Does”)
  • A quirk of history: HTC at one point acquires a majority share in Beats, resulting a short-lived period of Beats-branded Android phones (still available on Amazon!)
  • The real battleground for Google in the mobile platform wars: the economics of “default search” (briefly known thanks to the Oracle/Java lawsuit against Google
  • Google’s detour into smartphone hardware with the acquisition (and subsequent divestiture) of Motorola
  • The “fork-ability” of Android via the Android Open Source Project (versus “Google Android”), and the rise of Xiaomi, Cyanogen, Kindle Fire and other platforms
  • The ecosystem economics of the Android business for Google
  • “Defensive” versus “offensive” acquisitions, and protecting Google’s core search business
  • Could (or would) Google have built an Android-like platform without acquiring Android the company (or having Andy Rubin)?
  • Framing the technology world’s shift to mobile within (surprise) Ben Thompson’s Aggregation Theory
  • The current “moving up the stack” of the competitive playing field as the mobile landscape matures
  • Grading: Android versus Instagram?

Followups:

Hot Takes:

  • The iPhone 7 (and AirPods) announcement

The Carve Out:

Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)

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Episode 19: Jet

Episode 19: Jet

Ben & David break down Jet.com’s meteoric rise, culminating in Walmart’s blockbuster $3B+ acquisition of the company just two years after its founding. Will we look back on this deal as an ‘Instagram-like’ bargain or a ‘Pets.com'-sized blunder? And most importantly, can *anyone* compete with Amazon going forward? We speculate wildly.

Topics covered include:

Followups:

New section: Hot Takes! (thank you @cteitzel on Slack for the idea)

The Carve Out

Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)

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Episode 18: Special—An Acquirer’s View into M&A with Taylor Barada, head of Corp Dev at Adobe

Episode 18: Special—An Acquirer’s View into M&A with Taylor Barada, head of Corp Dev at Adobe

Ben & David are joined by special guest Taylor Barada, VP and Head of Corporate Development & Strategic Partnerships at Adobe, to discuss how large tech acquirers approach buying companies. This episode is full of great insights for startups & entrepreneurs who might find themselves navigating the M&A process, as well as anyone curious about the craft of dealmaking and the strategic approach of large acquirers. 

Topics covered include:

  • How conversations begin between startups and acquirers
  • The importance of building a relationship with acquirers over time and "investing in lines, not dots” (just like raising VC)
  • The often under-appreciated role of culture fit between acquirers and acquisition targets
  • How entrepreneurs should evaluate acquirers throughout the M&A process
  • Two examples of successful acquisitions Taylor completed at Yahoo in Citizen Sports and IntoNow
  • The M&A process at large technology acquirers, from initial conversations to LOI, due diligence and the definitive merger agreement
  • The relative roles of Corp Dev, business/product owners and executive sponsors in the M&A process
  • Common mistakes startups (and VC’s) often make in the M&A process
  • Different “categories” of M&A that acquirers think about, and the relative risks & opportunities of “core" acquisitions vs transformative new businesses
  • What percentage of deals Adobe looks at actually happen, and the importance of being willing to say no
  • M&A as a tool for strategy, and the different M&A cultures & approaches at different companies
  • Tech themes Taylor and Adobe think about as part of their M&A strategy
  • Evaluating the longterm success of deals and the importance of the M&A integration function

Followups:

The Carve Out:

Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)

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Episode 17: Waze

Episode 17: Waze

Ben and David navigate the mobile platform wars of 2012-13, avoiding speed traps en route to Waze’s destination as a $1B+ acquisition by Google.

Topics covered include:

The Carve Out

Followups:

Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)

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Episode 16: Midroll + Stitcher (acquired by Scripps)

Episode 16: Midroll + Stitcher (acquired by Scripps)

The meta show: Ben and David turn their gaze inward and examine the podcasting industry through E. W. Scripps’ recent acquisitions of the Midroll podcast advertising network and Stitcher podcast client. Featuring discussion of our own product process and metrics at Acquired. 

Announcements:

  • We’re pivoting! (not really) Our new show description: A Podcast About Technology Acquisitions That Actually Went Well
  • But we are launching a new feature! Since so many of you, our listeners, are also tech and startup folks and/or other builders, we wanted to create a space to feature cool products, companies and side projects you’re working on. Thus we’re adding a "Community Showcase” section to the show. If you’d like to be included just send us a Slack message or email, and we’ll choose one submission to feature on each show. This episode we’re highlighting BESTR, from community member David Resnick (aka @the_rezonator in Slack), which is an online platform to share lists of great things. Check it out and let David know what you think. 

Topics covered include:

  • Top Google search results for “acquired podcast"
  • Midroll’s origins in the comedy podcast Comedy Bang Bang (now an tv show on IFC) and exit last year to Scripps
  • The structural challenges inherent to podcasting as a medium and the gap between audience size/engagement and industry revenues
  • Opportunities for independent podcasters and our own audience and business metrics at Acquired
  • Stitcher’s long corporate history as a venture backed company, first acquisition by French music company Deezer, and now second acquisition from Deezer by Scripps
  • Problems with Stitcher as a product and industry reaction to the acquisition including John Gruber's responseBen Thompson’s article on Stratechery, and Ben & James Allworth's discussion on their excellent podcast Exponent
  • Handicapping Stitcher+Midroll’s chances for success within Scripps, and opportunities for new startups & innovation in the podcasting space
  • Pioneer Square Labs’ own past efforts in the podcasting space and their process for evaluating potential new company ideas
  • Shoutout to Pocket Casts and our listeners down under

Followups:

The Carve Out

Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or just-plain-hilarious transcription errors)

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Episode 15: ExactTarget (acquired by Salesforce) with Scott Dorsey

Episode 15: ExactTarget (acquired by Salesforce) with Scott Dorsey

Ben and David return to make their first foray into enterprise software, covering Salesforce’s $2.5B acquisition of ExactTarget in 2013 with the help of special guest and ExactTarget cofounder & CEO, Scott Dorsey

Technical note: due to an issue we didn’t catch during recording, audio quality is significantly lower than usual for this episode (especially David’s voice). We apologize but hope you’ll give it a chance anyway— Scott offers great wisdom & insights, and the ExactTarget success story is a inspiring one underdog entrepreneurs, especially (but not limited to!) anyone located in the Midwest or elsewhere outside of traditional "Silicon Valley-style” tech hubs.

Topics covered include:

  • The decision to start ExactTarget post-internet bubble and in Indianapolis, with zero software experience between Scott and cofounders Chris Baggott & Peter McCormick
  • Raising initial money from friends & family, followed by early investment and mentoring from Indianapolis venture pioneer Bob Compton
  • Building and scaling a great sales organization within a technology company
  • The importance of focusing early on a clearly defined target market (SMBs in the case of ExactTarget), and then “stair-stepping” up as the product and business scale grow over time
  • ExactTarget’s unsuccessful first IPO filing during the financial crisis
  • Building a "capital-efficient” early stage company, and the value of raising growth capital at the right time to step on the accelerator
  • The value of “secondary” investments allowing founders, employees & early investors to “stay hungry” by achieving some liquidity along the way
  • When and how to expand internationally and the importance of strategic resellers
  • ExactTarget’s second successful IPO filing and life as a public company with quarterly financial reporting to Wall Street
  • How the acquisition process played out with Salesforce and other bidders (including reference to ExactTarget’s incredible SEC filing detailing the entire negotiation—scroll down to "Background and Reasons for the ExactTarget Board’s Recommendation”, starting at the bottom of page 13)
  • Approaching the difficult task of integrating a major acquisition involving thousands of people
  • The fun story of ExactTarget’s winning Microsoft as a large customer—including actual sledgehammers
  • Scott’s new Indianapolis-based venture studio, High Alpha
  • Plus as always the "hard hitting" analysis across acquisition category, what would have happened otherwise, tech themes—and final grading

The Carve Out

Followups:

Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or just-plain-hilarious transcription errors)

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Episode 14: LinkedIn

Episode 14: LinkedIn

Ben and David cover the 3-day-old acquisition of LinkedIn by Microsoft for $26.2 billion. They cover LinkedIn’s founding story by Reid Hoffman, break down their core businesses, analyze recent stock behavior, and speculate on the future of the company inside Microsoft. The big question - were they worth the price tag?

Items Mentioned On The Show:

The Carve Out:

Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or just-plain-hilarious transcription errors)

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Episode 13: Push Pop Press (Facebook Instant Articles) with Todd Bishop

Episode 13: Push Pop Press (Facebook Instant Articles) with Todd Bishop

Ben and David are joined by Todd Bishop, technology reporter and co-founder of GeekWire, to discuss Facebook's 2011 acquisition of Push Pop Press. Highlights include:

  • The founding story of Push Pop Press by Kimon Tsinteris and Mike Matas.
  • The evolution of Facebook Creative Labs, Facebook Paper, and eventually, Facebook Instant Articles.
  • Facebook's role in the changing media landscape today.
  • GeekWire's experiments with Facebook Instant Articles, Google Accelerated Mobile Pages, and live video.

The Carve Out

Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or just-plain-hilarious transcription errors)

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Episode 12: Snapchat (?!)

Episode 12: Snapchat (?!)

Ben and David tackle their first failed acquisition: Facebook's 2013 offer to buy Snapchat. They cover the fascinating story of Snapchat's creation and growth, their blossoming business model, how it would be different inside of Facebook, and what the future holds.

Items mentioned in the show:

The Inside Story Of Snapchat: The World's Hottest App Or A $3 Billion Disappearing Act?

Inside Evan Spiegel's very private Snapchat Story

Join the Acquired Slack Community at http://acquired.fm

Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or just-plain-hilarious transcription errors)

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Episode 11: PayPal

Episode 11: PayPal

Ben and David return to technology acquisitions by examining a classic: eBay's 2002 purchase of PayPal. 

Items mentioned in the show: 

How the 'PayPal Mafia' redefined success in Silicon Valley  - Tech Republic

Instagram Will Be a $3 Billion Business This Year: Analyst

President Obama and Bill Simmons: The GQ Interview

"The Carve Out":

Antifragile: Things That Gain from Disorder

The Bill Simmons Podcast - Chris Sacca

 

Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or just-plain-hilarious transcription errors)

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Episode 10: Virgin America

Episode 10: Virgin America

Ben and David deviate entirely from the stated purpose of the show, tackling this non-technology acquisition that is so recent, we have no idea if it went well yet. But, the April 2016 acquisition of Virgin America by Alaska Airlines was so fascinating, we had to do it! 

Items mentioned in the show: 

Louis C.K. - Everything is Amazing and Nobody is Happy

Alaska Acquires Virgin America Investor Deck

“Measuring The Moat” Paper - Michael J. Mauboussin

Business Adventures - Twelve Classic Tales from the World of Wall Street

"The Carve Out":

Michael Mauboussin: "The Success Equation:Untangling Skill and Luck" | Talks at Google

 

Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or just-plain-hilarious transcription errors)

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Episode 9: Writely (Google Docs)

Episode 9: Writely (Google Docs)

Ben and David continue the cloud productivity saga with Google Docs. They examine the suite of acquisitions made by Google with a focus on Writely in 2006. They tackle:

  • The nuts and bolts of the Upstartle (company behind Writely) acquisition, founded by Sam Schillace, Steve Newman and Claudia Carpenter.
  • SaaS offerings in cloud productivity today.
  • Was this a good idea for Google?
  • Google's future bets.
  • A new section: The Carve Out!

Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or just-plain-hilarious transcription errors)

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Episode 8: Acompli, Sunrise, and Wunderlist (w/ Kurt DelBene)

Ben and David have special guest Kurt DelBene on to discuss Microsoft's acquisition of Acompli, Sunrise, and Wunderlist. Kurt is the EVP of Corporate Strategy and Planning at Microsoft, and joins to discuss Microsoft’s cloud-first, mobile-first strategy, and the importance of being cross-platform in the modern era. They cover:

  • How the app of Outlook Mobile on iPhone and Android came to be.
  • How to decide whether to build vs. buy, and how it plays into the strategy for Office.
  • How to preserve a culture and a team, and how Javier Soltero came to run all of Outlook at Microsoft.
  • The origin of Outlook on the PC, originally led by Brian MacDonald as “Ren”.
  • How to balance a business with competing priorities, and a decision-making framework for acquisitions in a large company.
  • How to measure the success of an acquisition, and how sometimes, it’s not by measuring revenue at all.

Episode 7: YouTube

Ben and David test the widely-held belief that YouTube was one of the most successful tech acquisitions of all time. In today's world of next-generation video platforms, mobile video, streaming, and chord-cutting, was it actually a great purchase by Google?

As discussed in the show, here is Sequoia's original YouTube investment memo - a rarely-shared gold mine for anyone interested in startup investing.