Get used to the word acqui-hire. As we explained in an earlier post, acqui-hire is a key way many established companies get the talent that they need to build up their existing or projected products while at the same time rewarding small startups for the time and effort they have invested in building up their own company. An acqui-hire also benefits the investors of such startup companies. It is truly a win-win-win situation. Think about that, a triple win. The acquiring company gets the talent that they need for their ongoing or upcoming projects and products. The acquired staff members get nice jobs at an established larger company but also get paid for their small company being bought out. Finally, their investors, whether angel investors or venture capital funders, get some of their investment money back and more. It truly is a win-win-win situation.
The open question is whether the acqui-hire trend benefits the consumer. As we have explained earlier, the most obvious casualty of most acqui-hire scenarios is the product, specifically the users of a startup’s product. Take the case of Facebook’s latest acqui-hire acquisition, Acrylic Software. This Vancouver-based maker of iOS and Mac apps is the outfit behind the RSS app Pulp. Pulp lets users enjoy a personalized newspaper on their mobile device, and also they are the developer of the secure data base Wallet app. Wallet lets you secure your credit card and sensitive financial information and all sorts of passwords and digital credentials. Facebook’s acquisition of Acrylic Software follows the typical acqui-hire format. The brains and the manpower behind the company are either set up in a satellite office or shipped off to where the acquiring company is located in this particular case. The folks at Acrylic Software are moving to San Francisco in the same space as Facebook’s design team.
What happens to these two great apps that Acrylic software developed independently? Following the footsteps of other acqui-hires, most notably Google’s acqui-hire of Meebo, the product is still going to be available but it will not be updated. Actually users of Wallet and Pulp are lucky because at least these technologies would still be available online. Meebo users are not as lucky. The majority of Meebo got shut down by Google. In essence, Google spent 100 million primarily for know-how and brain power. The same goes for Facebook’s acquisition of Acrylic Software. They are interested in the guys behind Wallet and Pulp, and they are interested more not in the apps themselves, but the brain power behind it. Sadly for users of Wallet and Pulp, while the apps are still going to be available online, they will not be updated. They did not get acquired by Facebook. What do you think about the recent acqui-hire trend? Does it help technology users and the technology market? Or does it have anti competitive or creativity damping features? It is our position that the jury is still out as to the overall impact of this particular trend on the internet and technology in general.