Acquisitions and sales
Should we buy this company, or sell ourselves?
Buying companies or stakes in them, and deciding whether to accept an offer.
Fewer than ten resolved cases. Read this page as a set of examples, not as a base rate.
What the cases suggest
Acquisitions split roughly evenly between success and failure here. Wider studies of thousands of deals find that many, often most, do not create value for the buyer. The successes bought something young before it was expensive and left it room to grow (Instagram, WhatsApp, GitHub). The failures paid for an asset whose value depended on conditions that changed (Nokia’s Navteq when maps became free) or bought a product and closed it (Dropbox’s Mailbox).
What separated the decisions that worked
- Buyers who understood why the target was growing, and protected that, did better than buyers who bought a position or a technology to fold in.
- Declining an offer is also an acquisition decision. Friendster’s refusal of Google’s offer looks worse in hindsight than it did at the time, which is a reminder that the record judges outcomes with knowledge the decision-makers lacked.
Where this evidence is weak
With so few cases, this group is better read as a set of examples than as a base rate. Studies of thousands of deals are a better guide to the odds.
By who decided
| Decision-maker | Cases | Paid off | Mixed | Backfired | Too early |
|---|---|---|---|---|---|
| Market leader | 5 | 3 | 1 | 1 | 0 |
| Challenger | 2 | 0 | 0 | 2 | 0 |
| Young company | 2 | 1 | 0 | 1 | 0 |
The cases
Each links to the essay, memo or road not taken where the decision is described and judged, with its sources.
- Buy the satellite network out of bankruptcy at a tiny fraction of its cost and serve niche markets. The same asset can be a disaster at one cost basis and a success at another.
- Buy Instagram and WhatsApp while they were young Buy the format your users are moving toward before it is obvious, and expect regulators to ask why later.
- Buy young social apps, Instagram above all, before they could grow into threats to Facebook. Write down why you are making an acquisition before you make it; the reasons will be examined later, by your board and possibly by regulators.
- Buy GitHub, the main home of open-source development, for $7.5 billion Incumbents can join a movement they opposed, if they change their behaviour before their branding.
- Consolidate the market for installed enterprise applications by acquiring PeopleSoft and Siebel Consolidating a market at its peak can fund the future, but it can also hand that future to the people you displaced.
- Invest in the Xanadu project to turn it into a commercial product. Fund ambitious visions in stages, each of which must produce something people can use.
- Decline Google’s offer and keep growing while the site slowed and fake profiles were deleted Never let the experience decay during your fastest growth; and do not go to war with your earliest users’ culture.
- Buy the digital map maker Navteq for about $8.1 billion Paying a premium for a scarce asset is dangerous when a richer rival can make it abundant.
- Buy a hit email app built on top of Gmail, then close it If your product runs on someone else’s platform, ask what stops the platform copying you, before you raise money or sell.
Other kinds of decision
- Opening or closing
- Business model and pricing
- Make, buy or partner
- Technology bets
- Product design
- New categories and markets
- Distribution and positioning
- Focus, exit and investment
- Trust, safety and privacy
- Executing large change
- Organisation and governance
- Public rules
Shrikant Kumar. “Acquisitions and sales.” The Telos Decision Record, Telos, version of 2026-11-03. https://shrikantk.com/record/acquisition/