The dating game: Top technology acquirers share tips for sellers22 May 2008

Microsoft, Google, Hewlett-Packard, eBay and Symantec executives shared selling tips and technologies of potentially strategic interest yesterday at the French Tech Tour in Silicon Valley.
Fraud detection, cloud computing (a means of adding capacity to a computer system through Internet-linked servers) and security are just some of the areas attracting growing interest from five of the world's largest software and Internet companies, M&A executives said in a panel for French start-ups at Microsoft's Mountain View campus.
Hewlett-Packard corporate development director Damien Henault warned company owners against approaching HP before they can demonstrate growing revenues and traction in their markets. “Don’t blow your chance by coming too early,” he said. Also, “We love to see the CEO and their team come directly," to make a pitch, he added. "Using an intermediary doesn’t help.”
Henault listed cloud computing, enterprise search, virtualization and data center optimization solutions as areas HP was watching. The Palo Alto, California-based company is focused on the middleware layer that facilitates and connects to enterprise information, he said.
HP, which agreed to buy listed outsourcing giant EDS this month for USD 13.9bn, may buy companies that will accelerate its time to market.
Meanwhile, eBay is interested in collaboration products for its Skype business and fraud protection technologies for PayPal, corporate development director Erik Stuart said. eBay, of San Jose, California, is open to evaluating pre-revenue companies, he said.
Microsoft’s corporate vice president Dan’l Lewin said his company could make buys to plug gaps in areas where it is not the number one or two player. “Gaps are usually pretty clear. There’s lots of spots and there is a lot of surface area,” he said. Microsoft recently entered the security space and may be evaluating buys, but Lewin declined to be specific on which security areas were a direct focus.
Microsoft of Redmond, Washington, is typically looking at 100 or so companies per month and, of these, Microsoft may buy 10 or 20 businesses under USD 250m in value. More expensive acquisitions would need the board’s approval, Lewin added.
For Cupertino-based Symantec, a perfect target has a mature product and enterprise-level customers who like the technology, but are hesitant to sign on with an early stage company, corporate development director Hans van Rietschote said. The California-based company is more interested in speaking with CTOs and senior engineers for its 90-minute pitch meetings than from CEOs and business development executives, he said.
Google meanwhile, is not interested in revenues so much as it is on monetizable traffic, technology and talented staff members, corporate development principal Amin Zoufonoun said.
During a company pitch, Microsoft’s team will typically ask what the company wants to get out of the meeting, said Lewin, adding that companies should be clear about hopes for a sale, partnership or investment. They may also be asked what to expect from partnering or selling to a large company. ”We’re not market makers,” he said. Lewin declined to comment on talks between Microsoft and Yahoo.
Potential buyers are not interested in hearing about the market opportunity as much as they want to see a demo of the company’s product and understand how it would fit with their organization, the executives said.

Back to Editorial