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The Great Circle Of Corporate Life III
May 24, 2010 | Permalink
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Well, this one actually has multiple possible reasons.
1) You acquire a property for access to its ideas (patents & IP) and/or customer base.
After that, you don't need it any more.
2) You acquire a property to kill it as a lesser but growing competitor.
After that, you don't need it any more.
(Example: There was a great firewall product out there. Symantec bought them and slowly killed the product, while trying to push people to use their crappier firewall instead)
By spinning it off in both cases, you get rid of dead weight (it has nothing more to offer) and it can die on its own without you having to explain to stockholders why you bought it if you weren't going to "build" it. It's kine of a form of "rapid onset parasitism leading to the death of the host".
Posted by: O Bloody Hell | May 24, 2010 3:00:18 AM
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