John Battelle reports that Microsoft was actually offering more money than Google was for Doubleclick and that Doubleclick went with Google anyway.
I heard the same things about Flickr. Rumors are that Flickr’s owners turned down AOL’s money, instead going for a lower amount from Yahoo. I never confirmed those rumors, but they were pretty consistent at the time.
Why would a company do that?
I can think of a few reasons.
1) Better cultural fit. I’ve seen that some employees are real jerks during negotiations and can sour a suitor on that person’s company.
2) Better reputation of main company. If you were a baseball player would you rather play for the New York Yankees or the Chicago Cubs? Especially if your goal is to win the World Series?
3) Better deal for employees. Free lunches? More stock options? Fewer relocations? Fewer potential layoffs?
4) Better business deal long term (stock price of one company might have more upside, for instance, which would sweeten the potential deal longterm).
5) More influence in industry by going with one company (one company might offer founders better positions, or more trips with corporate founders, etc).
6) Founders might like location of one company’s headquarters better than others (Silicon Valley offers techies a lot more economic opportunities than Seattle does, for instance, not to mention better weather).
Can you think of some reasons?
Oh, and John’s interview of Microsoft’s main lawyer is real interesting too. Especially the justifications for asking the DOJ to get involved in the deal.
I wonder when we’ll see an in-game advertising engine for Xbox? Probably not until after the DOJ gets involved, huh? Might remind folks that Microsoft still has billions of dollars in advertising revenues.