Yesterday brought the news that “DSP” FetchBack was acquired by GSI Commerce. The AdExchanger.com coverage accurately states that many e-commerce companies could benefit from an acquisition like this one. After all, layering on remarketing capabilities beyond their homegrown e-commerce product suggestions definitely makes sense.
The article goes on to ask if the M&A tidal wave has begun. Wisely, the author leaves the question unanswered. Ok, I’ll bite – no, it has not. Don’t get me wrong, there will be acquisitions. And it is likely that a company like Google, Amazon, or another huge name will be among the purchasers. But I just don’t see how the great M&A minds of our time can justify the purchases that are likely available in the coming months. And I don’t see this being the year of the acquisitions that we’ll look back and consider game changers.
The best acquisition targets are small, nimble companies with great ideas (often in technology) and great talent. From where I sit, there are lots of candidates, but many of them have overly inflated ideas of their actual value. Further, a smart VC is going to let the nimble players figure out this growing and fragmented market. Why should they make a purchase, only to find the market shifting away from the value they just acquired?
In the last two years alone, we’ve watched attention shift to and from ad networks, ad exchanges, media optimizers, buy-side platforms, sell-side platforms, verification companies, dynamic ad solutions and DSPs – just to name a few. So where would you place your acquisition bet today? I don’t think I’m being overly cautious when I suggest waiting this out a little further while the market finds true north. Don’t forget, we’re still not officially out of the recession and unemployment doesn’t seem to be improving anytime soon. Is this a market for a “sure thing” just yet?
The article goes on to ask if the M&A tidal wave has begun. Wisely, the author leaves the question unanswered. Ok, I’ll bite – no, it has not. Don’t get me wrong, there will be acquisitions. And it is likely that a company like Google, Amazon, or another huge name will be among the purchasers. But I just don’t see how the great M&A minds of our time can justify the purchases that are likely available in the coming months. And I don’t see this being the year of the acquisitions that we’ll look back and consider game changers.
The best acquisition targets are small, nimble companies with great ideas (often in technology) and great talent. From where I sit, there are lots of candidates, but many of them have overly inflated ideas of their actual value. Further, a smart VC is going to let the nimble players figure out this growing and fragmented market. Why should they make a purchase, only to find the market shifting away from the value they just acquired?
In the last two years alone, we’ve watched attention shift to and from ad networks, ad exchanges, media optimizers, buy-side platforms, sell-side platforms, verification companies, dynamic ad solutions and DSPs – just to name a few. So where would you place your acquisition bet today? I don’t think I’m being overly cautious when I suggest waiting this out a little further while the market finds true north. Don’t forget, we’re still not officially out of the recession and unemployment doesn’t seem to be improving anytime soon. Is this a market for a “sure thing” just yet?
Posts
0 comments:
Post a Comment