- Acqui-hire
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The term Acqui-hire is used to refer to those Mergers and acquisitions in which the chief target of the acquisition is not the company or the product, but the people building the product.Typically, the acquiring company simply hires the staff of the target company, thereby acquiring its talent which is the main asset and appeal.
The targets of an Acqui-hire usually tend to be small startups with less than 50 or so employees.
Contents
Etymology
Origin of the Term
The term Acqui-hire is a neologism which became popular in the 2010s.
The term Acqui-hire is essentially a portmanteau of Acquisition and hire.
Variant Spellings
The term has several variant spellings such as Acqhire or Acquhire but the most commonly used spelling is Acqui-hire, with or without the hyphen.
Manquisition
A common synonym used for Acqui-hire is Manquisition which is a portmanteau of manpower and acquisition. But the term Manquisition is less common and is rarely used. Perhaps the most cited use of the term Manquisition occurred when the acquisition of Sofa by Facebook was reported to be a Manquisition by VentureBeat.[1][2]
Usage of the Term
Paul Graham
The phenomenon of the Acqui-hire was first described by Paul Graham in his essay "Hiring is Obsolete". The essay was published in 2005, but it does not explicitly use the term "Acqui-hire". Nevertheless the essay was one of the first in identifying the general trend of the Acqui-hire. Paul Graham essentially theorizes that the free market is better at identifying talent and traditional hiring practices do not follow the principles of free market because they depend a lot upon credentials and university degrees. Paul Graham was probably the first to identify the trend in which large companies such as Google, Yahoo or Microsoft were choosing to acquire startups instead of hiring new recruits.[3]
New York Times
The New York Times used the term "acqhired" to describe the acquisition of Drop.io by Facebook.[4]
Huffington Post
The term Acqui-hire gained further currency when The Huffington Post published a list of the top 15 Acqui-hires of all-time.[5]
These top 15 Acqui-hires are (in order):
Hot Potato
Beluga
Aardvark
Like.com
reMail
Area/Code
Unoh
Fluther
Summize
Pelago
ChoiceVendor
mSpoke
The Huffington Post also noted that the general trend of the Acqui-hire was stifling innovation because most of the acquired products were later shut down.[6]
Facebook Acquisitions
It is worth noting that many of Facebook's acquisitions have been Acqui-hires and acquired products are often shut-down. Facebook CEO Mark Zuckerberg has stated that "We have not once bought a company for the company. We buy companies to get excellent people... In order to have a really entrepreneurial culture one of the key things is to make sure we're recruiting the best people. One of the ways to do this is to focus on acquiring great companies with great founders."[7]
Google Acquisitions
Several of Google's acquisitions have Acqui-hires, as noted by GigaOM. These acquisitions include Aardvark and AppJet.[8]
The acquisition of Labpixies by Google was called an Acqui-hire by Business Insider.[9]
Criticism
The general trend of the Acqui-hire or the Manquisition has been criticized because it stifles innovation and the acquired products tend to get shut down after acquisition.
The VentureBeat magazine has criticized Acqui-hires in its December 2010 article:[10]
- "A company is purchased just to hire its founders and maybe some other senior team members. In many cases, a substantial number of employees are laid off, the technology is scrapped, and users of the startup product are screwed."
See also
References
External links
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