Arrington wrong on Foursquare deal
Monday, April 19th, 2010Who the hell does Arrington think he is? Did he put a bunch of money and time to start a risky company? I don’t know how Techcrunch started, but he is way out of line here. If Foursquare gets a good offer from Yahoo, they should take it.
Don’t Sell Out, Foursquare. Not Now. Not To Yahoo.
It is becoming alarmingly apparent that Foursquare is strongly considering a sale to Yahoo. As of the end of last week they had put the venture capitalists vying for their attention on ice. Those VCs happily provided term sheets valuing the company at $80 million or so. But in the meantime, Yahoo and maybe others expressed interest in the company, and are reportedly offering way above that $80 million.
There are so many reasons why this deal shouldn’t happen. Here are just a few:
1. It’s bad for Yahoo: Yahoo’s senior team is grasping at straws, and they desperately want to find a way to stay relevant. But this is not it. What the heck is Yahoo going to do with Foursquare that will somehow turn around their business? Absolutely nothing, that’s what. M&A for PR purposes is not what savvy executive teams do. Whatever tech cred they think they’ll get by buying Foursquare is in their imagination.
2. Yahoo is a horrendous choice for Foursquare. It’s where startups go to die. They’ve bought so many companies that were so promising, only to see them wither on the vine. And the founders always leave in disgust (see Flickr, Delicious and the rest in the left sidebar on their CrunchBase page – how many of these were successful?). And sometimes they buy companies just to shut them down entirely a year later. See Yahoo Kills Maven: From Acquisition To Deadpool In 17 Months Try to imagine what Facebook would be today if Yahoo had successfully acquired them in 2006.
Arrington gives a few more reasons – if only #2 is really the bad one for the product and founders (he lists a couple more which are really exensions of #2). Foursquare, if they offer you a big $ figure, do what is right for your shareholders and yourselves.
It is becoming alarmingly apparent that 