The Gobble Effect – by “Scott W”

Entrepreneurship is an invigorating profession in which one can foster an incredibly new and potentially useful idea for the betterment of all.  In regards to the virtual world, the possibilities in the professional seem endless and forever growing.  An entrepreneur has no limits to the ideas and projects waiting to be formed in their imaginations and produced for the public.  But, once made and created, not all start-ups and entrepreneurial projects survive.  The “Gobble Effect”, or the tendency for a large company to buy-out smaller start-ups and or ideas, is always on the horizon based on the successes and or failures of a start-up.

Conglomerates are always on the prowl waiting for a successful start-up to brainstorm an innovative idea and/or product in which they can acquire for themselves.  This is much the case for a large company such as Google.  There have been many instances in which Google, having such large teams to create failed products such as Google Wave, are unable to successfully create new and innovative products for users.  Google, being the conglomerate it is, has the ability to buy out other start-ups in order to acquire their product for themselves.  Although the example is somewhat dated, in February of 2010, Google bought the start-up company Aardvark for $50 million in order to acquire the innovative product.  Aardvark was a social search start-up company in which the creators were former employees for Google.  This begs the question, why can Google not create such innovative products themselves?  As stated, Google, like many conglomerates, have difficulty producing such new products because of their inability to agree and comply with their rules and regulations.  The large teams and regulations hinder the conglomerates abilities to innovate for themselves.  So, in turn, they “gobble” up the ideas and products of small companies by offering large buy-outs for the products.

Entrepreneurship is a rough and tumble game.  If one can make it big with their original ideas and products, the big fish come around ready to snag the prize.  With start-ups being bought out left and right, it seems as though the “Gobble Effect” makes the big fish grow more and more powerful.  Although Google has its competitors and problems, they are constantly growing with the acquisitions of vulnerable start-up companies.  The big fish of the Internet.

http://gigaom.com/2010/02/11/google-buys-aardvark-for-50m-report/

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