Buy or Build?

When the Big Companies Buy Innovation

Yahoo!’s already for sale.  But, there’s speculation other online media players may be on the block – Buzzfeed, Twitter,  especially after Microsoft’s purchase of LinkedIn.

Why?  According to MediaPost, the big companies with cash flow can’t innovate internally so they’re looking to buy innovation:

Why all the consolidation? It’s obvious that big companies generally lose their innovation DNA. When was the last time IBM did anything interesting? But, as long as the cash flow is in the billions, big companies can buy innovation, and they’re doing it.

MediaPost is going so far as to predict that big names like Google, Facebook, Verizon, Amazon, Comcast and more are going to be making big acquisitions in the next year. We wouldn’t agree that Google or Facebook can’t innovate, but we do agree they have the cash flow and the appetite to buy other big online media companies.

On the other end of the spectrum, we’re seeing the likes of Hearst, Comcast, Viacom establishing innovation labs or investing in accelerators in the hopes of catching the next great distribution channel or monetization model. Of course, these aren’t huge bottom-line game changers but they are the future.

Helen WhelanHelen Whelan is a serial entrepreneur and consultant. She has 15+ years experience creating strategic partnerships and designing new business ventures. Her focus is in assisting start-ups and established companies innovate successfully through design-thinking and good leadership. Follow her blog at SuccessMedia or on Twitter @SuccessTV.