Marc Andreessen's hidden hostility to takeovers
Ning founder Marc Andreessen is already on the record about Microsoft's proposed takeover of Yahoo: He thinks it will likely go through, and turn out to be a good deal. It's a remarkably sanguine take for someone who saw Netscape bought and destroyed by AOL. In a thorough analysis for which he dragooned two corporate lawyers, Andreessen elaborates: Yahoo has few defenses, aside from a poison pill, and Microsoft will likely succeed. For all its thoroughness, the analysis is less interesting for what it says about Microsoft-Yahoo than for what it says about Andreessen.
Andreessen's conclusion is worth quoting in full:
We are learning that hostile takeovers have arrived in our industry. This is the second major hostile takeover so far — the other was Oracle's takeover of Peoplesoft — but there will be more.
This is significant because historically hostile takeovers practically never happened in technology. Potential hostile acquirors assumed that hostile takeovers wouldn't work because the target company's employees would bail and the target company's business would collapse.
It turns out that as technology companies become larger and more mature, acquirors are becoming increasingly convinced that neither of these assumptions hold. Perhaps employees of large tech companies aren't that bonded to current management, and perhaps many of them would actually prefer to work for a larger, more dominant combined company. And maybe as a consequence, the target's business would do just fine in the wake of a hostile takeover — in fact, maybe it would do better, due to advantages of combined size and scale.
My bet is that hostile takeovers, particularly of larger and more mature companies, are going to become increasingly common in our industry.
The excitement may be just beginning.
At Netscape, employees were bonded to management, and to each other; they left in such droves after AOL bought the company that observers started calling them "Netscapees." Without them, whatever value Netscape quickly proved evanescent.
What has changed in the near-decade since then? Yahoo, which grew up alongside Netscape — at one point, Netscape hosted Yahoo's servers — is that much farther from being a startup. Working there offers less risk, and less reward. Andreessen doesn't come out and say it, but he strongly suggests the place has become infested with careerists who would be just as happy working at Microsoft.
After the Netscape acquisition, Andreessen worked briefly and unhappily as AOL's CTO. For Yahoos, wheeling and dealing may be fine; but for him, it's the startup life or nothing. Andreessen may feign nonchalance at the prospect of more hostile takeovers in tech. But that doesn't mean he personally wants any part in them.