Some entrepreneurs start up a business with the goal of creating it big enough to sell off for a large lump sum, others create a business because they believe in their product and want to make it as big as possible. Of course, with acquisitions we can argue that the seller has the option to sell or not- however often these companies create such an appealing offer that it’s difficult to say no. For example, Apple spent $3 billion on Beats. (Welch, Chris) Is this bad for Beats as a business? They retained most of their managers, but now have a much larger parent company to help them in times of need and increase their customer base. This is the way I have thought about acquisitions before Adam pointed out that this may be ruining the innovation of a lot of large firms such as Apple, Google and Microsoft, and will potentially change the way businesses are run.
Small start-ups do not have the money for the most advanced technology (in most cases) or the time needed to create disruptive innovations (like Amazon in the book industry). It is usually left up to the larger more profitable companies to do this. So now they’ve shifted their focus on acquisitions, who’s going to innovate?
Welch, Chris. “Trent Reznor on His New Role at Apple: ‘it’s Everything I Asked For'”The Verge. Web. 3 Nov. 2014.