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Google or Yahoo?

Which web giant best nurtures its upstart acquisitions?

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By Stacy Cowley, FSB contributor


The favored exit strategy for internet startups is no longer an IPO but a splashy acquisition - preferably by Yahoo or Google. In the past decade each company has purchased around 40 small businesses, but for every YouTube (Google) or Flickr (Yahoo), there have been less flashy integrations and outright flameouts.

Google (Charts, Fortune 500) bought social-networking site Dodgeball in 2005 and then left it to flounder. "The whole experience was incredibly frustrating for us - especially as we couldn't convince them that Dodgeball was worth engineering resources," Dodgeball co-founder Dennis Crowley blogged after he and partner Alex Rainert left Google.

Rich Riley has fared better. He is still with Yahoo (Charts, Fortune 500) nine years after it bought his startup, Log-Me-On.com, for $9.9 million and developed its technology into the Yahoo Toolbar. "What has kept me here is that it's just an incredibly entrepreneurial culture," says Riley, who was recently promoted to senior vice president of Yahoo Europe.

In other deals, though, Yahoo's ventures have stalled. It spent around $13 million to buy Sold.com.au and two years later redirected traffic to eBay, abandoning the market.

So, head-to-head, how successful have Google and Yahoo been at advancing their purchases? Take a peek at FSB's scorecard.  To top of page

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