Category Archives: Acquisitions

What It Feels Like To Be Acqhired

AppNexus Razzle Dazzle Spaceacq·hire [uhkwa-hahyr]
verb (used with object), acq·hired, acq·hir·ing.
1. to buy a company primarily because you want its employees.

Acqhire is a term that has popped up often on tech blogs over the past few years to explain the type of transaction where a larger company buys a startup primarily for the team instead of a normal acquisition where they are buying the entire company and their products.

Facebook has been notorious for acqhiring companies such as FriendFeed, Gowalla, Beluga, Nexstop, Drop.io, and others. Other tech companies like Zynga, Groupon, Foursquare, Google, AOL, and Yahoo! have done these types of transactions.

Acqhire transactions often leave outsiders wondering things like:

  • Was this a good or bad thing for the startup?
  • Did anyone get rich?
  • Is the startup team happy?
  • Are the investors happy?
  • How does it feel to start a company, get acqhired, and shut down your product?

Well, I can now answer these questions since the company I left Yahoo! to start exactly two years ago today just got “acqhired” by ad technology powerhouse AppNexus. I thought it would be helpful to share my insights on the above questions and detail more about how/why this transaction has happened.

The Background

Right Media Eugene OfficeMy early career was a combination of startups and one steady job until Right Media CTO Brian O’Kelley hired me to work building out the publisher business there.

While at Right Media, Joe Garstka and I got the amazing opportunity to be a “startup within a startup” as we built an office and hired an incredible team in Oregon, while Brian was helping us across the country from New York. I’m very thankful that Brian and Right Media CEO Mike Walrath took the chance on us when the company was still young with 30 employees.

We built a very successful publisher product in Oregon called Direct Media Exchange, and we now know how that story ends — with Right Media being acquired by Yahoo!. I wrote a previous blog post that detailed being acquired and working at Yahoo! for three years which you can read here.

AppNexus Starts Its Rapid Rise

After Right Media was acquired, Brian started AppNexus with fellow Right Media alum Mike Nolet. At the time I already knew they were a strong duo, and when Brian offered me the chance to invest in their angel round, I really wanted to do so. Unfortunately, the legal team at Yahoo! had other ideas, so I never went down that path.

Brian also brought up the opportunity to be an early team member a couple of times over the next year, but I was enjoying the experience of learning at Yahoo! and staying seemed like the safest financial decision. In retrospect, it would have made more sense to have invested and joined the early team, but hindsight is always 20/20.

Starting GuideMe

GuideMe screenshotAfter the great ride at Right Media and then working my way up to being a VP at Yahoo!, it felt like it was time again to take a serious run at my own startup.

Former Right Media CEO Mike Walrath had started to do startup investing, along with Right Media angel investors Noah and Jonah Goodhart. Mike had become a mentor to me, so I was thrilled when they were interested in investing in whatever company I planned to start as well as take a very active role in the business.

Brian also invested, I put some of my own money in, and we ended up with enough total capital to pay myself and a cofounder living wages as well as hire a couple of other people. I now see it was a bit of a mistake to create a company and raise capital without really knowing what specific problem we had a huge desire to go solve.

When former Right Media and Yahoo! colleague Mike McNeeley joined me as a cofounder, he and Mike Walrath and I began trying to solve some basic problems we identified on the Web, such as what we felt were sub-par Yelp reviews that dominated the consumer reviews space. Even though starting a company in advertising technology was tempting, we decided to build a smarter local recommendation engine and our product GuideMe was born.

We went through various common startup problems and our first prototype didn’t gain much traction. We learned what we could from it and determined some other ways to solve the same problem, and I also finally successfully recruited Joe into joining the team to lead development for our next version. Besides improving our tech skills with Joe, we began contracting with a great designer named Jack Bingham out of the UK that did a great job improving our design.

Even though we built a much better product, we still weren’t generating the success we needed. Foursquare then added most of our product functionality to their mobile app with 10 million users, so we decided to keep the company alive but try building a product in new industry.

For the second time, getting back into ad technology was an option we discussed heavily, but we chose to focus on my passion of sports to create a social prediction game that would serve as a more casual version of fantasy sports called Fantuition.

During this transition phase, Mike McNeeley was living in New York while Joe and I were in Oregon, and Mike decided to return to advertising due to his passion for publishers and took a job as a product manager at AppNexus.

Following a Passion to Fantuition

FantuitionJoe and I built a mobile web prototype for Fantuition focused on Oregon Ducks Football that worked well. It wasn’t yet viral, but it was getting great feedback from users and had promise. That promise led us to quickly build a web version to go along with it and raise an additional round of financing from the ever-supportive WGI Group (Walrath and Goodharts), David Lee at SV Angel, Marker LLC’s Richard Scanlon, and Yext CEO Howard Lerman.

We also hired UI designer Shane Foster and engineers Brandon Lerner and Johan Mulyono to speed up our pace of development. Both Shane and Brandon previously worked at Right Media and Yahoo! with Joe and I as well.

AppNexus Enters the Picture

Over all this time I’d kept up with Brian and the progress that he and his team were making at AppNexus. I was proud of them, excited for them, and happily jealous that Brian’s more mature startup was doing fantastic while I was on my second idea and hadn’t gotten serious traction yet.

Our momentum eventually stalled a bit with Fantuition, but we had enough cash left to consider a bunch of options. We could commit to building an iPhone version of Fantuition, we could go for a major product tweak to try and find more viral traction, or we could have started from scratch again to try an entirely new idea.

In discussing these options with Brian, he mentioned that it’d be interesting to discuss the opportunity of having our team join AppNexus. He said AppNexus was growing like crazy, they could use more great people, our team has really good ad technology experience, and AppNexus needed to grow their geographical hiring base to get more top talent. If anything, he thought it’d be great to have Joe and I come to New York and visit the offices and talk to some of the team about the company and where they were headed.

From Skeptic to Convert

I initially felt like Brian’s idea was intriguing, but that I didn’t want to give up on building our startup. I was committed to our vision and team we had built, and I expected to enjoy the visit and then return home to figure out what to do next with Fantuition.

AppNexus officeHowever, visiting the AppNexus offices and meeting for a few days with some of the team combined with thinking a lot about the opportunity and the market changed me from a skeptic to a convert. AppNexus blew Joe and me away. The executive team is fantastic, the office is an amazing space, the employee energy level is high, the company’s numbers are headed in the right direction, and the opportunities seem endless. As I look to the next few years of how the ad technology market will play out, there’s no company that seems better suited to become a powerhouse.

I wanted to be a part of something bigger. I wanted to change the game like we did with Right Media, but to do it on a bigger scale and in new ways.

After Joe and I talked with Shane, Brandon, Johan, and our investors, we decided we wanted to pursue negotiating a deal with AppNexus. That deal closed today.

I’m extremely excited to start this next chapter and work with Brian, Mike McNeeley, Mike Nolet, and the rest of the former Right Media employees at AppNexus, as well as all the other talented people there I’ve met and have yet to meet. The company is on to something big, and it’s going to be a great to be a part of it.

Answering the Acqhire Questions

After that long-winded backstory, it’s time to answer the questions that people ask about acqhires.

Was this a good or bad thing for the startup?

In our case, it’s hard to predict if we would have ever reached sustained profitability or had a larger successful exit. But even with a lot of things working in your favor, making a startup work is hard. I learned that lesson, and even with cash on hand, the opportunity at AppNexus became greater than the current opportunity at an independent Fantuition.

Did anyone get rich?

The terms of the deal aren’t being disclosed, but the answer for almost every acqhire deal we’ve seen in the tech space over the last few years is “No, at least not yet.”

Since most deals or employment agreements involve equity grants from the acquiring company, it is possible for the larger company to improve its equity value enough that someone joining through an acqhire makes some good money out of it. For example, look at some of the first acqhires Facebook made when their valuation was much lower like FriendFeed or Nextstop.

Is the team happy?

Definitely. It is a bittersweet experience though to shut down the product you’ve been building and to stop thinking about the future for your startup. Across the board, our team has nostalgic feelings that our mission is coming to an end, but everyone is really excited about the bigger opportunity that is now in front of us.

Are the investors happy?

I believe the general sense is a bittersweet feeling. Taking investor’s money is a commitment that I took very seriously and I wanted to do everything in my power to make sure that I didn’t lose the money that had been invested in our company. That investor support means a lot, and I really didn’t want to let our investors down.

How does it feel to start a company, get acqhired, and shut down your product?

All the startup stuff you read about the emotional rollercoaster that founders go through is definitely true. It was emotionally tough to personally raise capital and have employees with families whose jobs are riding on the decisions I made.

I learned more than I ever thought was possible and I know I’m much better professionally from it. Even though it is painful to shut down our product, I’m extremely pleased to be joining one of the best technology companies in the world while also managing to continue to work with our team and live up to our investors’ expectations.

Consider this a story to be continued…

25 Things Facebook Could Have Bought Instead of Instagram

Instagram LogoWhen the news hit that Facebook had purchased Instagram for $1 billion I was eating lunch with my Fantuition cofounder Joe Garstka.

Joe’s immediate reaction was “Would you rather have 200 $5 million dollar houses, or Instagram?”

A great question. For the record, I think Facebook paying $1 billion to take out their most threatening future competitor was worth it no matter what happens to Instagram within Facebook’s control. Just think about how better positioned Yahoo! would be today had it acquired Facebook for $1 billion back when they almost did a few years ago. Yahoo! could have either leveraged Facebook to massive success, or killed Facebook off and they’d still own more of the consumer and advertising market they’ve lost to Facebook.

Whether you agree or not, that’s still a lot of money. What could Facebook have bought instead of Instagram? Let’s explore…

  1. 200 $5 million houses in Palo Alto
  2. 1,000 $1 million houses
  3. A used B-2 Bomber
  4. The New York Times Company (valued at $967 Million)
  5. All 66 of the most recent YCombinator Startups (gotta be a breakout startup in there right?)
  6. Yahoo!’s Core US Business
  7. AOL’s Patent Portfolio
  8. All the Facebook Mafia Companies: Path, Quora, Asana, Causes, GoodRx
  9. Yelp (when the stock drops a little)
  10. Every other mobile photo or video sharing application
  11. Pinterest (maybe)
  12. Foursquare
  13. AppNexus
  14. Spotify
  15. Rovio (Angry Birds)
  16. Gilt Groupe
  17. Tumblr
  18. 2 million of the New iPads
  19. Myspace, Friendster, Orkut, Bebo, and you’d still have about $990M in cash leftover
  20. The San Francisco 49ers (change name to San Francisco Likes)
  21. A small country (How about the Maldives?)
  22. A $20,000 hotel room every night for 137 years
  23. Ten $100M yachts (one for each of Zuckerberg’s direct reports!)
  24. Pay for 48 hours of the military activity against Afghanistan and Iraq
  25. Send a $20 bill to all 50 million Instagram user bribing them to use Facebook’s mobile app for photo sharing

If you were Facebook, would you buy any of those things instead of Instagram?

The Battle Over TweetDeck Isn’t Binary

TweetDeck imagePopular Twitter client Tweetdeck is reported to be in acquisition talks with both UberMedia as well as Twitter itself. For those unfamiliar, UberMedia is a company founded by Idealab’s Bill Gross that has been snapping up different Twitter clients and is rumored to be thinking about starting it’s own rival network to Twitter.

This is an interesting situation for many reasons and Mike Butcher of TechCrunch Europe analyzed what the players are probably thinking right now.

His conclusion is that this is a binary situation where if Twitter fails to buy TweetDeck they will be potentially losing a lot of future revenue or enabling a rival network. Therefore, Twitter must spend what it takes to buy TweetDeck.

I don’t think this situation is so black and white. There are other options and outcomes here, and it’s fun to think through some of this corporate strategy as an outsider.

Here are some other potential outcomes:

TweetDeck Goes It Alone
While most would think that TweetDeck would have to be crazy to not sell now while they have two acquirers feeling that they are key to their futures, there is the option to go it alone.

Why couldn’t TweetDeck go raise more money, take a little off the table for the founders, and either try and build their own Twitter rival or build a sales team and sell ads on their own? Going the acquisition route can obviously be a nice exit, but it also could see their company vision and dream die inside another company.

UberMedia Buys TweetDeck, Twitter Freezes Them Out
Mike Butcher seems to imply that if UberMedia had TweetDeck and all those influential users they’d be able to start their own network successfully or at least put the screws to Twitter to let them sell ads. Why couldn’t Twitter just say “Screw you, the TweetDeck users are more loyal to Twitter itself than TweetDeck.”

While denying TweetDeck users access to Twitter’s network would be seen as a bad PR move and piss off a lot of people, I have a feeling all those TweetDeck power users would move to an alternative client to get access to Twitter.

UberMedia Buys TweetDeck, Twitter Lets them Start a Rival
Again, I wouldn’t assume that if UberMedia started a competitor that people would be more loyal to their client application than they are to all the users on the Twitter.

This might depend on interoperability, but I know that I would ditch TweetDeck for another client if it was only accessing a much smaller network that lacked all the people I was already following and who followed me on Twitter.

It will be interesting to see how this plays out, but I don’t think it’s as simple as “whoever buys TweetDeck wins”. It’s an important piece of the puzzle, but I think there are more layers here than instant winning and losing based on who grabs it.

Why Didn’t Yahoo! Buy Huffington Post?

Arianna Huffington - World Economic Forum Annual Meeting 2011
Kara Swisher broke the news after the Super Bowl that AOL has purchased the Huffington Post for $315M with Arianna Huffington becoming the Editor in Chief in charge of AOL’s content properties. Techcrunch also has the internal AOL memo about the deal.
Read More …

Getting Acquired By and Working at Yahoo!

Yahoo! Times SquareAfter finishing over three years at Yahoo! and almost 3 years previous to that at Right Media, I thought it’d be worthwhile to write about my experience over that very interesting time and set of events.

This is simply my perspective as I know that others at Right Media and Yahoo! had completely different opinions and feelings about everything that occurred from 2004-2010. That being said, let’s take a walk down memory lane.

Joining Right Media

In late 2004 when my longtime friend Brian O’Kelley (currently CEO of AppNexus) reached out to me to see if I wanted to join a startup called Right Media. Brian was the CTO of Right Media and had built some interesting auction technology for their ad server. They wanted to start going more aggressively after publishers and he thought I’d be able to help with that effort.

Business Plan Pro from Palo Alto SoftwareI had a good job I enjoyed at Palo Alto Software, a Eugene-based business that is the leader in the business planning software space. I had worked there for four years and was managing a small team running their ecommerce site PaloAlto.com, as well as their main content properties Bplans.com and Mplans.com. In my spare time at night, I also was operating a site I started in 1997 called Wakeboarder.com that I later sold in 2006.

Despite the good job, I wanted the opportunity to join a younger startup and online advertising was a field that I had good experience in and was passionate about. My role was to do business development, product, and support work for medium to small publishers for Right Media’s ad network. Additionally, I looked forward to working with Brian again as we had started our first web business together in 1995 and worked together numerous times since (including a fun dot-com bomb in 1999).

Right Media was a New York company, but when I joined I made it clear I had no plans to move from Eugene. Fortunately, Brian and the rest of the executive team (Michael Walrath, CEO and Christine Hunsicker, COO) allowed me to start building a publisher-focused team in Eugene. When I joined my wife was excited for me to be able to work from home since we had recently had our 2nd child. However, after a month I had already hired three great people and found office space. It was off to the races.

Right Media Growth

Right Media LogoWhen I joined, Right Media was an ad network with some interesting and differentiated auction technology that helped power the network. It had not yet become an ad exchange, but the ad network itself was growing well. I helped build Right Media’s self-service publisher signup, and we began bringing in publishers at a steady clip. it’s funny now to think back to 2005 and how we were talking to publishers like “TheFacebook.com” which was at the time a few young college kids who didn’t know much about advertising for their college social network.

Not too long after getting the office space setup in Eugene the company started making the move to the crazy concept of an ad exchange. We had to go sell other ad networks who were our competitors to use the Right Media Exchange as their ad server or as an additional place to access supply and demand. It was a strange notion to many people externally, but it made a lot of sense to everyone within the company. Even then we didn’t know what would happen when we connected our ad network to another ad network to see how the buying and selling would perform on one platform. Fortunately, it worked quite well.

Right Media Eugene Office Door

The Eugene Office Entrance

The team in Eugene kept growing as we brought on engineers, account managers, and product managers to help support the publisher and ad network pieces of the exchange. The whole company was growing as well, but we were a startup within a startup. A bit of a strange concept, but we communicated with the team in New York well and I spent a fair share of time traveling to New York along with trips on the West Coast to meet with clients and attend conferences.

The time during 2005-2007 was amazing as every month saw growth and progress in the business. The Exchange continued to grow, improve in quality, and it started making real waves within the online advertising industry. We felt like underdogs taking on the establishment to change the industry, which is one of those things that makes startups so much fun and addicting to many people.

There were problems with quality, hiccups with the exchange scaling, and problems with spyware and other issues that the company took very seriously and worked through diligently. I think those things really kept us on our toes and kept us so busy that you really couldn’t stop and marvel at the fact that we were doing billions of impressions per day by the time 2007 hit.

During 2006 though our team in Eugene had noticed that small to medium publishers were having a tough time working with the complexity of the Right Media Exchange. We used the APIs to build RMX Direct which was later renamed to Direct Media Exchange.

This product was the first self-service publisher yield optimizer that was a simple ad server that allowed publishers to get demand from the Exchange while also managing and auctioning their inventory to 3rd party ad networks like Google Adsense, Valueclick, and others. This was a forefather to the products later built by companies like Pubmatic, the Rubicon Project, and AdMeld.

Direct Media Exchange also was experiencing the same kind of rapid growth and success of the Right Media Exchange, but at a smaller scale that was a bit more under the radar. The team in Eugene was pretty proud of what we’d built together.

Pre-Acquisition

My first personal experience with Yahoo! directly came in 2006 during Ad Tech San Francisco. At about 10 am on the first day, Brian told me that he had a meeting scheduled with Yahoo! down in Sunnyvale that afternoon that he could no longer make due to an important meeting at Ad Tech. He suggested I go along with Ant Taylor and Kees Schouten who were both at Ad Tech as well. What was interesting about this was that Ant and Kees were actually in their first week on the job at Right Media and didn’t even really know what their roles were yet. Additionally, I had no context for the meeting besides that “we are talking to Yahoo! about becoming a client.”

We headed down to Sunnyvale and met with Ryan Christensen, who was doing Pricing and Yield Management for Yahoo!’s display business. We managed to get through the meeting even though we lacked context and really spent most of the time learning about how Yahoo! was currently running their non-guaranteed business and talking about how Right Media’s Exchange could help with some of those problems.

Later that summer I was in New York when a group from Yahoo! came to meet with the Right Media executive team. The morning of the meeting, Ant and I were tasked with building a presentation for one portion of the meeting. As a great example of the hectic pace of the startup world, we again lacked context and tried to scrap our way through it anyway. As you’d expect, we created a terrible presentation that wasn’t usable for the meeting. The meeting apparently went well, but the panic I felt that morning was something I’ll never forget.

Yahoo and Right MediaIn October of of 2006 things really started to get more real as Yahoo! invested $40 million into Right Media for 20% of the company and to become a major client of the Exchange. This was a huge win both from a company stability perspective financially, but it also provided a marquee quality client who validated the Exchange in the eyes of the industry.

Of course, there were feelings internally and rumors abound through the rest of 2006 and early 2007 that Yahoo! might want the whole company. As visitors from Yahoo! became more frequent to the offices in 2007, it was a not so subtle secret they were doing due diligence and diving deeper on our technology.

After spending Monday through Thursday at a conference my flighted landed in Eugene and I received a call from Christine Hunsicker our COO. She said I needed to be in New York by 9:00 am the following morning to demo Direct Media Exchange to people from Yahoo! and to bring along our lead product manager and lead engineer for the product. I told her this would be tough as I hadn’t been home all week and it was already Thursday afternoon. She said she wasn’t asking if I could do it or not, so we drove the two hours to Portland to take a red eye to New York.

We flew all night, changed in the bathroom at JFK, and then made it to the Right Media offices a bit late. The three of us walked into the main Right Media conference room where there was a few Right Media executives and then a number of executives from Yahoo!. At the time I wasn’t familiar with any of the Yahoo! executives as it was my first time meeting them, but it was a pretty high-powered tech crowd in the room consisting of SVP of Product Mark Morrissey, SVP of Engineering David Ku, Chief Scientist Qi Lu (now the President of Online Services at Microsoft), VP of Product John Slade, and halfway through the meeting Jerry Yang also made an appearance.

We were asked to demo Direct Media Exchange so we connected our product manager’s laptop to the projector. Remember, this was after a night of travel and no sleep. As the demo begins, the first thing everyone notices is his Firefox toolbar is set to Google as the default search engine. Oops, strike one!

After some half-joking and half-serious comments about the toolbar, I gave an introduction to the product and ask our product manager to login to the application. He then clicked on the username form field and hesitated. I wasn’t sure why he was doing so, but he gave me a look that let me know something was wrong. I urged him to proceed, and he typed in a Gmail address to login to the application. Apparently it was the only address he had with administrative priviledges. Oops, strike two!

We endured some more jokes that were increasingly serious, but then continued to give a quality demo of the application with plenty of good dialog. I thought we’d moved past the early mistakes when we were asked whether we were building a specific future enhancement. Our product manager responded “Absolutely, I’ve already created some mockups I can show you.” I wanted to bang my head on the desk at that point, as I knew what was coming and he opened up mockups that he’d recently created in MS Paint. That’s right, they were screenshots of our app with hand-drawn new features scribbled on it. A true professional mockup! Strike three?

Fortunately, the strength of what we’d built and the traction we’d achieved with Direct Media Exchange in the demo was what ended up hopefully being memorable. The company overall ended up being a compelling option for Yahoo! after Google had just ponied up $3.1 billion for DoubleClick just a few weeks earlier. Yahoo! purchased the remaining 80% of Right Media it didn’t already own for $680M making it one of the largest ad technology acquisitions of all time.

The Acquisition

Yahoo! AcquisitionGetting acquired is an extremely interesting experience. Of course the team celebrated, as it was a large acquisition and it really validates what you’ve been working so hard on. This was the goal right? Or at least one of the big goals?

On one hand you are happy knowing that your company’s stock is now liquid, and you have the hope of the business becoming even bigger and achieving more success with the “endless” resources of the acquiring company. It was also exciting to go work for one of the pioneers of the web who had big businesses in so many areas online.

However, even having never been through an acquisition, I knew many things were going to change. Immediately the people in our Eugene office began to wonder what would happen to them and if our Eugene office would be closed. At this point we had over 30 employees in our Eugene office but people wondered if they’d have new managers, if they’d be laid off, and what would happen to the products they were working on.

The acquisition process and integration itself for me personally was good. It could have been improved probably with more structured education on Yahoo!’s businesses and such, but I felt very welcomed by employees at Yahoo!, and got to immediately start spending time in various Yahoo! offices teaching people about Right Media and what we did.

On my first trip to the Burbank office a group of employees I had just met invited me with them to an Anaheim Might Ducks playoff hockey game. It was a good experience to get to know them personally and see my first live hockey game at the same time.

Moving to their IT systems and and way of working was also pretty easy, but there were still challenging questions the companies had to work through. What would happen to the Right Media brand? Do we integrate websites? What do we switch to Yahoo! technology and what don’t we? Can we still use Google Analytics to track our sites? Most of these things got resolved over time without too much trouble.

Post-Acquisition

After the honeymoon period was over more challenges began to pop up. Specifically, there were strategic questions that showed everyone was not perfectly aligned on where everything was headed and how it should be built. Should we build on top of the existing Right Media technology? Should we start and build a new ad platform from scratch that has the functionality of Right Media combined with the guaranteed ad serving system Yahoo! had built in house?

After the decision was made to build a new platform from scratch (APT) there were then issues trying to keep building Right Media Exchange functionality as many engineers had been moved to work on the new project. Additionally, many engineers had to work on scaling Right Media itself with all of Yahoo!’s added volume and integrating with Yahoo!’s finance systems. This left little room in the road map to keep pushing Right Media as hard as many of us had hoped.

Despite this, there was a lot of excitement over the new system being built and the strategies to do some amazing thing in the display advertising space.

Personally, I had been promoted and was excited about taking on responsibilities at Yahoo! that also went outside of Right Media. It was interesting to learn about new areas of Yahoo!’s business and work with so many new people within the company. I’ve heard other acquisition stories where people from acquired companies were buried in the bigger organization and not given prominent roles. Yahoo! definitely gave various people at Right Media strong roles within the company, although there are definitely people who did get stuck in unfortunate situations.

Microsoft Acquisition Attempt

MicrohooNot too long after getting settled in at Yahoo!, Terry Semel was replaced with Jerry Yang as the CEO and Microsoft went public with their acquisition offer. This was a very interesting time to say the least. It was a rapid ascent to being a startup striving for attention every day to having Yahoo! on every news site all day long with rumors and speculation about the Microsoft acquisition. People tried to not make it a distraction, but I think everyone would be lying if they said there wasn’t a lot of time spent reading that speculation online every day and talking casually around the offices about the situation. For the most part it seemed like most projects kept their momentum as everyone knew that it was a long way from happening for sure.

Everyone I talked to internally loved the idea of locking in a stock price in the $30s, but no one was very excited about having to integrate two companies of that size with different cultures and missions. I felt the same way, and was wondering what would happen to Right Media in the situation of an acquisition.

Of course, it all fell apart. It was followed by the attempted search deal with Google and it ended Jerry’s time at CEO. In retrospect based on the stock price alone you’d have to classify that it was a mistake for Yahoo! to not take one of the Microsoft offers. However, Yahoo! is still a profitable independent company today which I’d say is better for the overall health of the web than if the acquisition had been successful.

Besides the Microsoft acquisition, Yahoo!’s display strategy was also affected by the economy going into the recession. A lot of the ideas around building guaranteed cross-selling relationships for display didn’t make a ton of sense when every publisher was struggling to sell their own inventory alone. This turned a lot of the development of the APT platform to be on building it internally for Yahoo! while continuing to support the Newspaper Consortium who was using the product to run their display ad businesses and sell Yahoo!’s inventory to local advertisers.

The soured economy led to two rounds of layoffs as well. Laying off members of my team and seeing former Right Media employees in Eugene was definitely the lowest point at Yahoo!. Some of the decisions on who to layoff just didn’t seem to make any sense, although struggling to figure it out has never gotten me anywhere. That being said, the company definitely felt overstaffed to me at the time, so it seemed like layoffs did make sense for Yahoo! overall.

The New Yahoo!

YahooQ New Branding CampaignAfter all that drama, Carol Bartz was brought in as CEO and began to make changes throughout the company. Carol did a nice job shutting down certain products and businesses, selling some pieces of Yahoo!, and the change brought some executive turnover and org structure changes.

Unfortunately, one of those products that got shuttered was Direct Media Exchange. While it was sad for our team in Eugene who built it, the reality was that the code hadn’t been touched since the Right Media acquisition. The product had continued to grow and was doing over 20 billion impressions a month and was easily profitable since there was only a small team doing customer support for it. I was a believer though in the company’s mission to focus, and smaller publishers were not a priority of the company as also demonstrated by the shutting down of the Yahoo! Publisher Network product for small publishers.

The major area though that Carol “outsourced” was the search technology business to Microsoft. This became a huge strategic focus for the company and I took the opportunity to move completely out of the Exchange area into B2B Marketing to run the marketing for the Search Alliance with Microsoft. It was a nice change of pace to work on search, work with Microsoft directly, and to work with a new group within Yahoo!.

During this period our office in Eugene was closed as our lease ran out and we were down from 30+ employees to 7 after the two rounds of layoffs, people moving to other Yahoo! offices, or leaving for other job opportunities altogether.

It became clear to me over this time though that I was getting the entrepreneurial itch again and I wanted to get back to building products. One of nice things about a big company is there are specialists to perform almost every task, but I felt more and more like I spent my whole day just talking to people internally while doing status reports and internal presentations. While there is some value in that, it feels like I was disconnected from products and customers. I could have explored moving into other parts of Yahoo!, but I really wanted to start a company and get back to being an entrepreneur.

Overall

The bottom line was the whole thing was a positive experience for me. I’m glad Brian initially recruited me into it and that the Right Media executive team was supportive of building a presence in Eugene.

It’s interesting though is how perspectives can differ, because I know some people at Right Media felt the acquisition was a very negative experience for them. For me though it was positive to have Right Media stock become liquid, I was exposed to many things I never would have learned in a startup or small company, and I got to have front row seats to some very interesting things happening in technology. The best part really may have been many of the friends I made along the way, many of whom I’m sure I’ll work with again. Not a bad way at all to spend the early part of my 30s.

I wish the ending would have turned out different for Direct Media Exchange, and I wish the momentum of the Right Media Exchange wouldn’t have slowed down. As I was leaving Yahoo! though, it appeared that more emphasis was being put back on that business so hopefully that continues that way.

Did Google Buy AdMob for Ads, Data, or Both?

One of the biggest acquisitions in the advertising and technology space over the past couple of years occurred this week Google recently purchased AdMob for $750 million in stock.

There has been considerable speculation about why Google not only purchased Admob, but spent so much money in doing so. The obvious off the cuff answer is to get their hooks into the mobile display advertising space by acquiring the most well-known mobile ad network. Some people such as Niki Scevak don’t think that’s a particularly good idea, and others such as Silicon Alley Insider seemed to have to work a bit to justify it.
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Adobe Buying Omniture: What does it mean?

It was announced today that Adobe will be acquiring web analytics powerhouse Omniture for about $1.8 billion. First, congratulations to both parties and hopefully it will lead to great things in the future.
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A Good Time to Be a Publisher! Or Is It?

Over the last week some surprising publishers have been snapped up by larger companies for what appears to be some monetary victories for the publishers. I’m not sure why it’s surprising, beyond the fact that I don’t think there were many rumors about these companies, and it’s an eclectic mix that seems to point towards a general trend in a particular hot industry.

Here’s the deals announced over the past week:
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Will Yahoo’s Cheap Acquisition Strategy Lead to Long Term Success?

Yahoo! LogoRead/Write Web has a nice post detailing Yahoo’s cheap acquisition strategy over the past couple of years. The implication is that although Yahoo was hammered by the media and investing community for not spending billions on YouTube and Facebook, they actually may have a good strategy in investing in cheap acquisitions that turn out to be big and very important down the road.

One could easily argue that Flickr and del.icio.us were very smart and cheap acquisitions, and that MyBlogLog and others could be much bigger than they are today.

Additionally, it’s nice that Read/Write Web was positive about Yahoo’s investment in my employer Right Media for our ability to monetize display advertising now and what innovations we may bring in the future.

MyBlogLog Gets Yahoo’d

Announcements are all over the place, as MyBlogLog has been acquired by Yahoo! and will be made part of the Yahoo Developer Network.

MyBlogLog is pretty fun, kind of a social network for bloggers and blog readers at this point which makes it feel like a blog social network/LinkedIn hybrid, with an added voyeur twist of both seeing who’s browsing your blog or being seen reading other blogs. While I’m not sure it fits perfectly with the social network aspects, MyBlogLog has some simple blog analytics built in as well, so if you have the code for the reader widget like you see in my right sidebar, it also is tracking some basic stats for me.

The analytics it provides are basic but useful for most bloggers, and I actually find myself looking at them more often than some other analytics packages I used or have used simply because I’m using MyBlogLog to add a contact or join a community. So, simply having the location of the analytics being part of something else useful is making mre more likely to use them. They also have a few more advanced analytics that you have to pay to have access for. It’d be interesting to know what percentage of blog publishers are paying for analytics. 5-10% perhaps?

Being that I work for a company that Yahoo is a minority investor in, when I heard about the announcement I immediately started of thinking of ways that the application I head up called RMX Direct could potentially work with MyBlogLog. My immediate thought is that if bloggers using MyBlogLog for analytics, perhaps we could do an intergration of some type to provide ad network management through RMX Direct as well. Perhaps I’ll get in touch!