David Rosenthal: evaluation

Transcript context

…Totally. And this is a really great transition into acquisition category. So for listeners that are new to the show, we assign a category to every acquisition and those buckets are people, technology, product, business line, asset, or other. I think so that when we look at this acquisition, it was really a vertical in Yahoo buying a horizontal in Overture, and Overture obviously trying to serve many search engines with their technology; Yahoo buying them to integrate with their one search engine. And, you know, these are sort of hard because let’s assume that a lot of the value created by Overture was by summing across all their different customers. Well, as soon as they get acquired by Yahoo, it's pretty easy to see that boy, if you’re prioritizing for the vertical for Yahoo, you don’t want them serving all these other customers. But the issue was, like even if you’re going to take that value destruction hammer and do that because you believe that the synergy and the sum of the parts created by that acquisition is better than all the previous value by serving all those customers for Overture, they actually didn’t pick. And the issue is, I think the acquisition category I'm going to assign is, the problem is they acquired a technology and they also acquired a business line and tried to keep both going. So, you know, they had the technology that they were integrating into Project Panama but they also had this business line and Overture continued to serve other customers. Like you got to pick one and you got to go hard at the strategy. Yeah, I’m going to say something similar. For me, I’m going to assign it a technology category. But my take on it was Yahoo acquired a technology, they just acquired a… you know, I was going to say bad technology but the reality is it wasn’t bad in and of itself. It was just bad relative to Google. It was orders of magnitude less powerful. And I’ll get into What Would Have Happened Otherwise and Tech Themes a little bit about the importance of technology that I referred to earlier. But yeah, for me this is clearly an attempted technology acquisition. It is.…

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