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Why Big Companies Purchase Small Ones

Bill Trenchard, CEO of LiveOps, a teleservices company, and founder of Jump Networks, which was acquired by Microsoft in April 1999, discusses why big companies purchase small companies.
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It's so big, and there's so many people in the organization that have so many interests, in so many different areas, that there's often more than one group working on what it is that you're doing, and none of them are getting to market. For example, there was a part of the company, which we learned about later, that had already built a calendar for them. But here they were, going out and buying one, so, anyway... So, Microsoft acquires the companies largely, because it really does speed them the market. And this is why a lot of people buy companies, this isn't just Microsoft. Big companies need to get the benefit of small teams, and small dynamic organizations that are very effective. And they can really leapfrog forward, and not have to go through tons of internal debates about technologies to use, and who to partner with, if they just acquire the right company. So, they had thought that they wanted a calendar for their portal, and so, this was the right thing to do. And, so, that's why they really acquired us

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