The Social Analyst is a weekly column by Mashable Co-Editor Ben Parr, where he digs into social media trends and how they are affecting companies in the space.
It’s undeniable: Foursquare has been on fire in a way that no startup since Twitter has come close to achieving. It’s changing the world and acquiring new users at a rapid place, so perhaps that’s why it doesn’t surprise us to learn that Yahoo is trying aggressively to acquire Foursquare.
According to Kara Swisher of AllThingsD, Foursquare and its founder Dennis Crowley have two options: raise more money from venture capital firms that would value the company at around $100 million, or be acquired by Yahoo for $125 million or more.
These are not small numbers and this is not an easy decision. The payday from Yahoo would be enough for most of the Foursquare team to be very happy for the rest of their lives. Any overtures from the Internet giant should be taken seriously.
However, if Crowley and the Foursquare team want to make the kind of worldwide impact that only a handful of people can claim to have achieved, all while building a company with far greater value than the money Yahoo is offering, then it needs to take venture capital money, forgo the immediate payday, and amp up Foursquare’s growth to the Facebook and Twitter level.
The Hit-and-Miss of Acquisition
When a hot tech start is acquired by a major technology company, the results have historically been all over the charts. For every YouTube success (acquired by Google in 2006), there is a Jaiku failure (acquired by Google in 2007). Sometimes the additional resources of a major tech company can help spur an acquisition to greater heights, while other times bureaucracy can leave it to languish.
