If you can’t beat ‘em, buy ‘em
Monday, September 21st, 2009 | news
Last week, Intuit announced that they had purchased Mint (to the chagrin of former Quicken users who had been happy to escape from years of dissatisfaction with Intuit).
If you can’t beat ‘em, buy ‘em, and then either grow ‘em or eliminate ‘em off the market. It’s a common tactic for the big guys who have trouble growing breakthrough products in-house.
The problem is, it’s too risky to be a reliable strategy. A competitor might snap up the company first. It could start a bidding war forcing you to overpay. Bad acquisitions will happen, as with any huge investment. (I’ve seen too many). And the upstart may refuse to sell themselves to you for inordinate greed or non-business reasons (such as, you are Microsoft). You have to be among the fattest of cats to be able to absorb this risk.
Intuit has struggled to invent substantial new products. And the Quicken business was slowly dying off (even Microsoft exited the business). Intuit got a great deal by buying the disruptive Mint.com for a mere $170m.
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