{"API Acquisitions"}

Divorces, Mergers And Acquisitions, In The API Economy

As I hear stories of the HP separation today, I'm reminded of how companies of all shapes and sizes interact, both historically, and in this potentially new API driven business landscape we find ourselves in. I’m not an expert in running any size company, but this won’t stop me from being a pundit on the subject! ;-)

The HP story brought me back to a conversation I was having the other day with a VC, regarding what is next for Apigee, and when I said IPO, the VC asked me if maybe SAP would buy them. I know that SAP and Apigee are partnering, but honestly I don't know jack about Apigee’s business model, or even SAP, so I really don't have a clue what is next, I can only guess.

The conversation did prompt me to create this Evernote (birth of any API Evangelist blog post), helping me flush out some of my thoughts on how companies could potentially work together in an API driven business environment. I know that one way that big companies get the talent and market share they need is through the acquisition of smaller companies, something that has worked well for some time. However, another aspect to this history that only rarely gets discussed, is how many people, and brands just disappear into these acquisitions—never to be seen or heard from again (until their next start-up of course).

I’m not inferring that big companies shouldn't acquire little companies. The point I'd like to make, is that maybe larger companies should consider how they could be a little more interoperable, and achieve numerous loosely couple relationships, versus always just acquiring a company. You never know, you maybe get all of the benefits of a relationship, without the negative of bringing a start-up in house only to see it chewed up by your internal bureaucracy—you know it happens!

I see plenty of large multinational corporations working through subsidiaries, shell companies, and other incarnations to move money around and avoid tax burden, you'd think it would make sense from an efficiency, agility, and cost saving standpoint as well. I know many companies are being built, exclusively for acquisition, but when they are going something very well in the space, generating value “as a start-up”, why do you want to throw a wet blanket on that? There are other ways to invest, and engage with these start-ups to benefit from the exhaust they generate.

Anyways, I guess I made my point. I just personally feel that the way we work as individuals is forever changing because of the Internet, and I can't help but think the era of bigcos will begin to fade, and the companies that succeed will learn to be leaner, and develop the loosely couple partnerships they need from companies, to be successful, and yes sometimes this requires investment, but doesn’t have to involve full blow acquisitions.

Who knows, I could be high on my own farts here, but I think divorces, mergers, and acquisitions will look very different in the API economy.

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Twitter Acquisitions

Acquisition of technology startups by companies is a regular part of business today, providing a way for these companies to get the technology, talent, as well as user and market share they need to be successful. These acquisitions play an important part of API ecosystems, with API owners hoping developers build the next killer feature that users will love, something they can invest in, and developers dream API owners will notice their work and purchase their “startup”.

Looking back at the acquisitions made by a company can function as a sort of “tea leaves”, allowing us to interpret the companies motivations, possibly telling us where they are headed and who they might acquire next. As part of my Twitter research I wanted to look at the acquisitions made by Twitter over its six year history:

2008
07/2008 - Summize - Social Search

11/2008 - Values of n - Social Software Developers
2009
12/2009 - Mixer Labs - Location Information Engine
2010
04/2010 - Atebits - Tweetie Client for iOS and Mac

04/2010 - Cloudhopper - Mobile Messaging

06/2010 - Smallthought Systems - Database and Analytics

12/2010 - Fluther - Question & Answer Service
2011
05/2011 - TweetDeck - Web and Desktop Twitter Client

05/2011 - AdGrok - Advertising

07/2011 - BackType - Social Analytics

08/2011 - Bagcheck - Social Sharing and Discovery
09/2011 - Julpan - Real-time Social Search Engine

11/2011 - Whisper Systems - Mobile Privacy and Security
2012
01/2012 - Summify - Social News

01/2012 - Dasient - Internet Security

03/2012 - Posterous - Blogging Platform

04/2012 - Hotspots.io - Social Media Intelligence

05/2012 - RestEngine - Personalized Email Marketing Service

06/2012 - nclud - Boutique Design Agency

Twitter’s acquisitions are diverse and appear to be very strategic. Twitter has wisely invested in search, security, messaging and data storage, while also taking control over mobile and desktop clients.  Twitter has made some smart acquisitions out of the ecosystem, and you have to wonder why acquisitions of companies like Tweetie and TweeDeck caused such a backlash, while acquisitions like Backtype, Julpan and Dasient you don’t hear much of anything from the ecosystem.

I would like to understand other players in the Twitter ecosystem like the firehose partners and investors more, before I draw too many conclusions from the acquisitions Twitter has made.  Twitter has already made 6 acuisitions this year, the same amount as Twitter acquired in 2011, and we are only halfway through the year.  It makes you wonder who Twitter's next acquisition will be.

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