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Comment by jrockway

5 days ago

This seems to be common for corporate America in general. I used to work at a YC startup. We kiiiiiinda maaaaaaaybe ran out of money (not my department) and happened to get bought by a large investor that also happens to be a US-based hardware manufacturer. Two years and countless reorgs later, they laid everyone off and as far as I know, are no longer in the business of selling the software products they bought. They never figured out how software worked, never had anyone managining the division for more than 6 months, and got bored. I think they thought by moving everyone over to Microsoft Word and Windows laptops (peppered with a half-hearted threat about RTO), they would just magically make billions of dollars the first month. It didn't happen.

I am beginning to think M&A are just some sort of ego thing for bored megacorp execs, rather than serious attempts to add efficiency and value to the marketplace. (Prove me wrong, bored megacorp execs. I'll wait.)

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jrockway

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aurumque  5 days ago

Having been through a few acquisitions myself, I think there is a perverse incentive where buying and destroying any competition (real or imagined) leads to positive enough outcomes that it doesn't matter if the underlying asset is destroyed. Nobody would come out and say that, but when an acquisition is tossed aside there may not be enough repercussions to prevent it from happening again.

  • tinco  5 days ago

    Intel bought a drone company that was producing the only drone that was good enough for my real estate inspection company to use. They acquired it and then killed it a year or two after. The inspection industry didn't have a proper drone for years after that until DJI started getting serious about it and produced the M30E.

    It was just senseless, Intel doesn't have real or imagined competition from a drone company, it wasn't even close to being in the same market. They just believed the hype about drones being the next big thing and when they found out they were too early they decided they didn't have the patience to wait for drones to become a thing and they killed it. There was no long term vision behind it.

    • zvr  5 days ago

      The high-end Falcon models were an engineering marvel and, as you say, nothing else in the market was even close.

      I don't know about "real estate inspection", but another use case was for them to be used in oil rigs in the North Sea to inspect the structure of the rig itself. They had to be self-stabilizing under high winds and adverse weather conditions, and they had to carry a good enough camera to take detailed photos.

      Unfortunately, while the technology was there, the market wasn't. Not many wanted to get a $35K drone to be able to sustain this business.

      2 replies →

  • timewizard  5 days ago

    This is one of the main reasons we added anti monopoly provisions to our laws more than 100 years ago. Market dominance is a recognized factor in allowing this inversion of rewards to occur.

    That's the face of it. Labor is a market as well. The impacts of these arrangements on our labor pool is extraordinary. It's a massive displaced cost of allowing these types of mergers to occur born out by the people who stand to gain the least from the merging of business assets.

ethbr1  5 days ago

> I am beginning to think M&A are just some sort of ego thing for bored megacorp execs

It seems like a low risk effort to put a promising inexperienced exec in charge of a recent acquisition.

If they're a screw up and run it into the ground, imagine how much damage they could have done in a megacorp position of power.

Megacorp saved (at the cost of a smaller company)