When a Big Company ‘Acqu-hires’ Your Beloved App Disappears

Livestar app screenshot

image: VentureBeat

Earlier today Yahoo announced that it had bought a small local-mobile recommendation app called Jybe. On the same day it’s being reported that Pinterest has itself grabbed the conceptually similar Livestar.

Livestar and Jybe were both “acqu-hires,” to get the founders/engineers of these companies and deploy them on other things at Pinterest and Yahoo respectively. In both cases the local-mobile recommendation apps associated with these companies will go away (not that many people were using them yet).

(Let me disclaim everything I’m about to say with the following: If I were in the shoes of these founders I would also probably sell.)

However these acquisitions, coming on the same day, illustrate the “perishable” and unstable nature of the internet and the tools or services marketed to consumers. There are numerous examples of apps and online services that have been shuttered, upsetting and disrupting people’s electronic lives. The recent decision to close Google Reader is just one.

You could say “that’s the market, that’s capitalism.” (Que sera sera.) But in the traditional offline world companies and products don’t seem to appear and disappear so rapidly.

In many instances internet companies are created and funded specifically to be acquired, with no thought of creating a genuine business that would last more than, say, 3 years if everyone is lucky. Lots of startup activity is essentially real-estate speculation.

I don’t begrudge anyone the fruits of their ideas and labors (read: money) but there’s something quite pernicious about all the short term thinking and cynicism that accompanies the development of many internet startups. While it may create great wealth for a few lucky-smart people and investors there’s not much long-term value created for users or the economy — especially if the app/site is promptly shuttered because the acquisition was really just a way to hire the engineering team.

Maybe there can only be one or two Googles and Facebooks, every decade. But there’s something highly dysfunctional about the pattern I’m describing. And on a purely mundane level people lose access to a tool or site that may have been quite useful to them.

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2 Responses to “When a Big Company ‘Acqu-hires’ Your Beloved App Disappears”

  1. Joe says at

    Good post. There is a serious lack of planning out a business model which pervades some innovative ideas, but once again, to your point, can’t always blame the founder cashing out on their hard work. Product life cycle is in hyperdrive for these guys.

  2. Greg Sterling says at

    You don’t have a lot of people starting internet companies saying “I’m going to work here for 20 years.”

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