Thoughts On The Google / JotSpot Deal

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Thoughts On The Google / JotSpot Deal


I have just learned that Google bought JotSpot.

I’ve been following JotSpot for a long time now and I have a lot of respect for Joe Kraus (JotSpot’s founder/CEO).

Thoughts On The Google Acquisition Of JotSpot
  1. What does this mean for SocialText?  The immediate response is likely to be “SocialText is in the enterprise space and Google is not really focused on enterprises”.  Don’t know that I completely buy this argument.  SocialText has not been a phenomenal success yet.  The Google/JotSpot deal could create some visibility for the Wiki market (and help them).  But, more likely, it’ll taken even more air out of SocialText’s sails.

  1. Does Google care about Wikis?  There’s really no evidence that prior to this transaction, Google cared all that much about Wikis.  They’ve been quietly sitting on the sidelines regarding this particular area.  My guess is that Google is more interested in the people and the fact that JotSpot has an interesting platform for building custom apps than it is Wikis in the traditional sense.

  1. What’s Next?  Google is continuing an interesting series of “early stage” acquisitions.  I think this is a smart strategy for Google whereby the pick up companies before they’ve raised a ton of capital and driven the valuation up.  Ultimately, Google doesn’t care that much about finding companies that have built up huge market-share (YouTube being the exception) and prefers smaller deals before price premiums have been baked in.  

The good news is that Google’s smaller deals like this will continue to drive interest in the software product space.  Unlike Microsoft in the 1990s (which was more likely to want to crush competitors in a space that they were interested in), Google seems to have shown a proclivity of buying interesting startups with interesting teams and interesting technology.

Congrats to the folks at JotSpot.

Posted by Dharmesh Shah on Tue, Oct 31, 2006


As I recall, Microsoft also had a practice of buying early stage startups for strategic reasons.

Usually the acquisitions were really quiet, and often only disclosed in SEC filings. FrontPage was one (larger) example, and the precursor to the .NET runtime was another.

Of course, they also bought bigger companies (Visio etc.) and squashed other companies, but it was the squashing that got all the attention.

I suspect Google actively PRs these "tiny" acquisitions as a strategic way to cut the legs out of an emerging market (anyone want to invest in my really cool web based word processor?) to give them time to properly productize what they've bought.

posted on Tuesday, October 31, 2006 at 12:40 PM by Chris Knott

The acquisition wire is hot today- Reddit was purchased as well.

Today seems chock full of good news for the web 2.0 economy.

posted on Tuesday, October 31, 2006 at 12:59 PM by Erik

I agree with Chris ... I have a long nose for strategic monoply actions ...

Also, they are scaring out the rest. Something goes like hay jump off the train we are hitting Google ...

posted on Tuesday, October 31, 2006 at 1:14 PM by

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