Dan Rosensweig: Reasons to Acquire a Company

When we were at Yahoo, we had determined that we could iterate but not invent. Because once you're a large company, you have operating metrics. Once you're a public company, there are numbers that you need to make. And almost everybody you hire is about executing on what you need to do right then and there. And one of the big difficulties, you know, the dilemma that they talk about is the fact that it's very difficult to invent. So if you look at what Yahoo did, if you look at what Google's done, look how many companies Google has acquired over the last couple of years because you don't have the DNA in the company. Things change in technology. So what we were looking for were things where we thought the fire hose of Yahoo could be a king maker. So if we could put our audience against something, we could make it big and we could run the table. And most of the acquisitions we made were extremely successful as a result of that. Sometimes we were buying things for a team and sometimes we were buying things for technology. And so when we bought Flickr, how many of you use Flickr? So at the time that we bought Flickr, it had something like 600,000 users. And now it has 40 or 50 million, maybe more than that. I think it left at 40 million. We knew that it was never going to be a business, but we knew it was going to be an unbelievably value utility for people where we could attract audience, bring them back and benefit our core business model at very low cost. And so we were willing to buy it. And the thing has been incredibly successful for Yahoo. So our business was advertising. People always ask, is Yahoo Media company or Yahoo Technology company? We were an advertising company. We made our money off advertising. And so we needed to attract eyeballs and get the highest value we could for each eyeball. And so we were looking for things that could fill in those gaps and create reason for people to start their day and end their day with Yahoo.