Acquisitions--a better startup exit strategy?
Late last week, Facebook quietly acquired location “check-in” service startup Hot Potato—no doubt an addition to its recently launched Places service. This is the latest in a string of startup acquisitions for Facebook (which included 40 patents from Friendster and Chai Labs), but the company is not alone. A number of big tech companies have been on a shopping spree lately, especially Google, which recently gobbled up social media company Jambool for $70 million.
While Google and Facebook are clearly gearing up for a face-off in the social networking space, the growth of recent acquisitions suggests that M&A is an increasingly relevant exit option for startups. If this is more than just a temporary trend, the question becomes how this will affect innovation and competition in the tech space--will the strong just keep getting stronger, or will the Googles and Facebooks of the next generation persevere?
