Buy-hire (doesn’t have to) beware
Big companies would buy winning startups. Or, they’d hire the people at the starts that weren’t going to make it. Now, there’s a third option.
A few weeks ago, Google didn’t acquire the AI startup, Character AI. Back in March, Microsoft didn’t acquire the AI startup Infection AI. Both megaliths skipped the stage where they buy promising young companies in favor of paying enormous and amorphous licensing fees for un- or under-used software and hiring all the key company’s people. What’s going on Techlandia?
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Tighter regulations, hefty fines, and threats to breakup tech are at highs we haven’t seen since the Justice Department ripped Bell and IBM apart in the 80s. Man, I loved the 80s. It’s amazing how many unforgettable lines from the era’s iconic movies explain what’s going on in the real world today. See if you can spot the source material for this one.
Lawsuits have been dropping all morning, which means that big tech CEOs are trying not to get sued so they can keep their model going a little bit longer. Which means that the people who buy the little companies at the big tech are goin’ bat-shit. They’re saying, “Hey, we’re spending all this money, and Christmas is just around the corner, and anything I buy increases the risk that I’ll lose my job and I ain’t gonna have no money to buy my son the G.I. Joe with the kung-fu grip, right? So, they’re panicking right now, they’re screaming “DON’T BUY! DON’T BUY!” They're panicking out there right now! I can feel it! They out there!
G.I. Joe gave it away, right? Answer below.*
There’s a reason 80s lessons fit these days like a glove. We didn’t know it at the time, but the digital age was just starting. The last analogs sauropods were clomping around old-growth forests. But the best reason is that we took staid crap like the Hunts failing to corner the silver market and made it timelessly funny. Call me old-fashioned but using kids toys that would triggered the parents of kids today to laugh at failure just seemed right to me.
Today, we’re on the cusp of the next tech era. Digital dinosaurs are clomping around the old-growth internet desperately trying to hold on to their reign. They’re in an epic battle with Departments of Justice all over the world that weirdly resemble the Cincinnati Union Terminal are that are staffed with people cloaked in masks and capes with nicknames like, “The Count.”
In the last decade the European Commission has sued Google €11.5B for various flagrant violations of acceptable business conduct. The same folks have fined Meta (parent of things like Facebook) €1B and has another €11B pending. Not to be outdone, the State of Texas micro-derm-abrasioned Meta $1.4B for misusing facial recognition. California, Texas, along with regulators in Canada and Australia Robin Hooded Google and gave their spoils to news groups. Oddly, few news groups write stories that take issues with taxing the evil rich to pay the chronically inept.
These days, being a giant is ok. Ish. You can be large. You just can’t have too many tentacles. The problem is giants don’t innovate; they buy innovation. Now they can’t. So, buyers have become buy-hires.
Buy-hire /ˈbīər/
You don’t need to buy the building. You can just squat.
Somewhat amazingly a paddling of anas platyrhynchos are waddling by and quacking incessantly and the UK’s Competition and Markets Authority (CMA) said Microsoft’s deal to acquire Inflection “does not give rise to a realistic prospect of a substantial lessening of competition as a result of horizontal unilateral effects.” I think that’s long for, “We don’t plan to do squat.”
Which is, exactly, what the biggest players in Techlandia wanted to hear. Even though Microsoft paid $650M to license a worthless product no one uses or would pay for, and they hired the company’s whole tech team, and they made the company’s CEO the Executive Vice President of Microsoft AI, and the CMA said Microsoft acquired “certain assets” from Inflection and the CMA sees that as a “relevant merger situation,” Microsoft proved buy-hiring is the new play for acquisitions.
But don’t take my word for it, Jessica Lessin who runs The Information said as much five months ago, “This is the new way the Magnificent Seven [tech stocks] are going to do acquisitions, you get the [intellectual property] and team without FTC scrutiny or approval.”
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*Trading Places.
But you already knew that didn’t you?