I'm sure the tech was part of it, but my guess is that they were mostly buying it for the ready made team.

I think this is pretty similar to the Monsanto acquisition of Climate Corporation (where I worked) several years ago.

If you're a big traditional company, building an innovative technology team from scratch is really hard, even if you're willing to spend a lot of money on it. It takes a lot of time and effort, and you probably don't have the internal leaders or culture to attract top talent.

Buying a promising startup and continuing to operate it as an independent organization is a straightforward (if expensive) way to solve this bootstrapping problem. From a strategic perspective, it can make complete sense if the opportunity cost of getting a product to market a year or two late can be measured in billions of dollars. There are a lot of advantages to being first to market.

Yes. That's the thing about acqui-hiring. As much as we like to pretend that with enough dollars you can buy the talent required to own a product-space, the fact is that in certain spaces, individual mortals can create billions of dollars of value. You just have to pick the right space and the right individual.

> Yes

Do you have any data showing acqui-hiring of $1 billion or more? I've never heard of such an amount and retention after an acquisition is really, really hard. Seems crazy to spend so much only to have people leave after 1-2 years (or less depending on the company).

To take an example at the far end of the spectrum: in 1989 WPP (the world's largest owner of advertising agencies) bought The Ogilvy Group (a very large ad agency) for $864 million ($1.7 billion in today's dollars.) Ogilvy was nothing but people...there was no other value (except, maybe, the brand, but that's debatable.) At the time people criticized the deal, saying "all of their assets go down the elevator every night." But it turned out to be a great acquisition for WPP.

While the founders and first few employees may leave after an acquisition, preferring to work for themselves, everyone after that is an employee and, as long as they are managed and compensated well, will generally not care so much who the company's owner is.

Fair enough. Good example. I just don't hear anything near this size happening as a talent acquisition but I guess it's possible then.

Maybe more plausible when it's the core talent + specific tech applicable to the problem?

You're buying both a base platform / proof of concept+ implementation and the key individuals responsible for creating it. Then training your people on the platform with the deeper knowledge from the key individuals in the 1-2 years you've got them employed.

If you can buy a breakthrough and enough knowledge transfer to get your people operational on adapting it, it's worth it even if you don't get any additional breakthroughs?

A lot of the ad network and exchange companies were bought by Yahoo and Google for $100+ million basically for the team and not the technology.

Although the "technology" more or less worked, it was discarded and re-written or substantially changed.

In the case of Google, I'm thinking of AdMob.

In the case of Yahoo, I'm thinking of the 2-sided ad exchange network they bought and then ripped out the 2-sided features.

Self driving cars is a fiercely competitive space, maybe they shopped it around?

Uber, Apple, Tesla, and every car company would be interested.